Moody's confirms Portsmouth rating with negative outlook

Moody's Investors Service has confirmed the Baa1 long term corporate family rating of Portsmouth Water with the outlook revised to negative from ratings under review.

Moody's said the confirmation reflected Portsmouth Water's low business risk and the regulatory framework and its "solid and cost-efficient performance track record, underpinned by cost allowances for the next regulatory period that significantly exceed the company's request."

Moody's said the rating also reflected the company's and low gearing –anticipated at 55% over the next five years "underpinned by equity contributions from the company's owners to

support material investments and offsets some of the pressure of the low allowed returns."

The upside was, according to Moody's offset by risks associated Portsmouth's Havant Thicket Winter Storage Reservoir over ten-years and "uncertainty around the ongoing procurement and permitting process, which is reflected in the negative outlook."