Thames Water - comment

Another comment from the UK Chancellor Jeremy Hunt at the IMF meetings in Washington where he hinted that any restructuring of the balance sheet of Thames Water should be led by the market rather than the customers of Thames Water. He also said that the government was prepared for all possible outcomes and that a special administration would not harm the UK as a destination of investment capital. All this leads us to believe that at least the Tories would favour a consensual restructuring agreed between the creditors and Thames Water itself and would prefer to intervene as little as possible. The pushback from market participants for this has been that without any government intervention or support - there would be a higher probability of contagion to other infrastructure assets that have been financed in a similar way. We are looking forward to the publication of the company’s business plan tomorrow.