Southern Water Hit by Downgrade as Debt Costs Surge
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Southern Water Ltd was forced to suspend dividend payments until at least 2025 as Fitch downgraded its debt and borrowing costs surged.
In the first sign of distress in the industry moving beyond Thames Water Ltd, Southern said net financing costs had increased more than 40% to £278.6 million ($355 million) in the year to April 1, largely due its inflation-linked debt. Ratings company Fitch downgraded Southern Water to ‘BBB’ on Friday and maintained a negative outlook, due to the company’s reduced ability to pay off its debts.