Thames Water Scrambles to Avoid Fines as It’s Cut to Junk
- Moody’s downgrades company and some debt to junk after ruling
- License requires utility to keep two investment-grade ratings
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Thames Water asked regulators to help it avoid massive fines after it was downgraded to junk by Moody’s Ratings, adding to the financial pressure on Britain’s biggest water supplier.
Plans proposed this month by regulator Ofwat would make it harder for the struggling utility to raise new equity, Moody’s said Wednesday in cutting its rating on the company and its top-ranked bonds. The downgrade means Thames Water may have breached the terms of its license, which requires it to maintain investment-grade credit score from two ratings companies, and it could now face fines of as much as 10% of its revenue.