Anglian outperforms sustainability bond targets

Anglian Water (Osprey) Financing has provided a positive performance update, exceeding targets for its Sustainability Linked Bond (SLB) published in 2021.

The £300m SLB will mature on 31 July 2028 and was originally priced at Gilts + 150 bps, giving a coupon of 2.00%. Anglian Water achieved the following key performance indicators by 31 March 2025: net operational carbon emissions reduced by 30% from the 2018/19 baseline (31.97% achieved); and capital carbon reduction ratio reduced by 65% from the 2010 baseline (66.1% achieved).

• As a result of the commitment by Anglian Water Group’s shareholders to inject £500m of equity, Moody’s has affirmed the Baa1 corporate family rating of Anglian Water Services and the Baa1 backed and underlying senior secured debt ratings of its financing subsidiary Anglian Water Services Financing. It has changed the outlook on both entities to stable from negative.

Anglian Water has replaced its existing £950m committed liquidity facilities maturing between March and June 2026 with £1bn of new facilities available over three years, improving its liquidity position over the first half of the new regulatory period and demonstrating continued debt market access.

Anglian Water's PR24 final determination was challenging. It was one of five companies to appeal to the Competition and Markets Authority. If it performs in line with the representations it made about its draft determination, Moody’s says it could incur penalties of around £30m per annum, together with a further £20-35m of annual penalties if it cannot reduce both total and serious pollution incidents from historic levels.

Once the CMA redetermination process is completed, Moody’s expects Anglian Water to set out more concrete proposals of how it will achieve its 65% Anglian Water and 75% MidCo leverage targets. Moody's expects further shareholder funds will be needed at both the Anglian Water level and higher up the group structure to achieve these levels by the end of AMP8.