Assured Guaranty presses for a creditor solution for Thames

(by Verity Mitchell)

Assured Guaranty, a US insurance company, is reportedly pressing the Government not to put Thames Water into special administration, arguing this could trigger costly debt redemption. The insurer reported exposure to UK water company debt of £12.4bn at 31 December 2025. This included  £1.78bn of financial exposure to Thames Water.

Assured Guaranty provides financial guarantees to 15 UK water utilities, wrapping bonds with non-payment insurance to improve their credit quality. Aside from Thames, it said: "The UK water companies provide an essential public service and are in a regulated industry where Assured Guaranty guarantees senior level debt at the operating company level, almost all of which has underlying investment grade ratings. Interest coverage for most UK water obligors that Assured Guaranty has guaranteed remains adequate, with most obligors reporting coverage in the 2x to 4x range. Net debt to Regulated Capital Value (regulatory gearing) for most obligors is in the 65% – 75% range.”

Assured Guaranty is not only significant for utility insured debt; it finances other UK infrastructure and is active in project finance. However, because of political and regulatory uncertainty, it has refused to insure any new UK water bonds for the last two years.