Thames Water has been judged by two of the world’s leading credit rating agencies as being on the brink of default, possibly bringing a government-backed rescue deal closer.
Moody’s and S&P said that Thames Water was struggling to access cash quickly enough to fulfil its debt repayment obligations.
The pair downgraded their credit assessments of the company’s top-rated £16 billion debt by five rungs to the equivalent of CCC+, a rating that means that the business is extremely risky and on the edge of failure.
“We see material risk of a debt restructuring, which we would consider akin to a default,” S&P said, adding that it viewed Thames Water’s “management and governance as negative” after the company said this month that it could run out