Thames Water Offers New Bonds, Plans Buyback to 'Optimise' Debt ...

(Bloomberg) -- Thames Water Ltd is selling new debt and tendering some of its 2025-maturity bonds as the embattled utility looks to tackle its massive funding needs for the coming years.

The UK utility is offering seven-year and 20-year bonds on Monday, both with spreads of 340-350 basis points over UK gilts, according to a person familiar with the matter, who asked not to be identified because they’re not authorized to speak about it. It is concurrently planning a tender offer for some of its bonds due in June 2025. 

Thames Water has been at the center of a crisis that’s roiled the UK water industry as soaring debt costs coincided with public pressure to spend on improving ailing infrastructure and stop releasing sewage into waterways. The utility provides water to millions of households in London and surrounding areas, and is regarded as too big to fail, with the crisis going as far as talks with government officials about a temporary nationalization last summer. 

The bonds are being issued through the Thames Water Utilities Finance Plc arm. The tender offer for the June 2025 bonds “is, amongst other things, to optimize the company’s debt maturity profile,” Thames Water said in a filling.

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