S&P downgrades Welsh Water following option to accept price controls

S&P Global Ratings has downgraded Welsh Water after it chose to not to appeal Ofwat’s determinations for its 2020-25 price controls.

S&P dropped the grading of the senior secured (class B) debt issued by Welsh Water to 'A-' from 'A', and lowered the issue rating for subordinated (class C) debt to 'BBB' from 'BBB+'. The ratings agency affirmed the 'AA' issue rating with a stable outlook on the four senior secured class A bonds issued by Welsh Water.

“The downgrade reflects our expectations that the company's credit metrics will not be in line with the levels we see as commensurate with 'A' and 'BBB+' issue ratings over the next regulatory period, AMP7, starting in April 2020,” said S&G’s Associate, EMEA Utilities Julien Bernu.