Thames Water Crisis Fragments Industry’s $60 Billion Bond Market
- Metric of dispersion in water company bond spreads has surged
- Investors focus on gearing, amount of inflation-linked debt
The Thames Water headquarters in Reading, UK.
Photographer: Hollie Adams/BloombergThis article is for subscribers only.
The crisis at Thames Water Ltd. has left the $60 billion market for UK water utility bonds deeply divided.
A measure of the dispersion in spreads in the sector has surged over the past few weeks as investors try to separate companies they see as well run, with manageable debt loads, from those that face the most operational and balance sheet issues. The standard deviation almost tripled after reports of a possible temporary nationalization of Thames Water, before settling at around double typical levels, according to data compiled by Bloomberg.