South East Water aborts bond issue

(by Verity Mitchell)

South East Water has aborted plans to issue a bond of around £200m after insufficient investor interest.

The company cited the volatile political and regulatory backdrop as a reason for the sluggish investor response that followed its roadshow to debt investors last week. But the firm’s significant operational challenges may also have contributed to a lack of debt investor interest.

South East Water has £150m of revolving credit facilities in place to cover short-term liquidity requirements. It has also successfully reduced its debt: Regulatory Capital Value gearing fell to 66.5% from 72.5% at the end of the financial year following a £200m equity injection by its shareholders. 

But its inability to raise funds for its turnaround plan and AMP8 investments is concerning. The company confirmed in its 2025-2026 Annual Report that while it had sufficient funding to last until July 2027, it does need to secure new debt.