Moody’s affirms SES Water ratings and changes outlook to stable

Ratings agency, Moody’s, last week affirmed the Baa2 senior secured underlying debt rating of SES Water and changed the outlook to stable from negative.

Moody’s said the action reflected its view that SES Water "will be able to maintain an adjusted interest coverage ratio (AICR) of around 1.3x and net debt to regulatory capital value (RCV) of 70-75% on average over the current five-year regulatory period (AMP7), in line with the guidance for the current rating. Specifically, Moody's expects that additional bulk supply revenue and the recovery in later years of lower revenue in 2020/21 because of coronavirus restrictions will partly mitigate the overall tough regulatory settlement for AMP7, which included a significant cut in allowed returns and challenging cost and performance targets.”

SES Water’s chief financial officer Paul Kerr said: “I’m very pleased that our outlook has now been reverted to stable, bringing us in line with the overall view of the water industry. This is the result of open dialogue with Moody’s about our improving financial position and sustainable future plans, along with strong support from our Board and shareholders.”