Water Co. Investigates Inflation Swaps Mart

Wessex Water is considering entering the sterling inflation swaps market to hedge its next bond issue.

  • 19 Nov 2004
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Wessex Water is considering entering the sterling inflation swaps market to hedge its next bond issue. The U.K. water company has issued both fixed-rate and inflation-linked notes, but may swap its next fixed-rate issue to receive a floating rate linked to the retail prices index. U.K. water companies are required by regulators to raise prices in line with inflation, so they have natural inflation exposure.

Mark Watts, treasury manager in Bath, explained issuers of inflation-linked bonds pay a premium over fixed- or floating-paper in the current market conditions because of the distortion of the U.K. inflation curve. To avoid paying this premium, Wessex Water would look to enter an inflation swap. "The next time we come to the market we would look seriously at inflation swaps," said Watts.

Wessex Water issued its last bond in October last year. Watts said it will likely make its next issue in around a year.

  • 19 Nov 2004

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 16 Jan 2017
1 Citi 22,118.13 61 9.00%
2 Barclays 20,987.41 55 8.54%
3 JPMorgan 17,406.75 53 7.08%
4 HSBC 16,333.52 48 6.64%
5 Goldman Sachs 15,454.74 49 6.29%

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Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 17 Jan 2017
1 Commerzbank Group 114.00 1 66.16%
2 CaixaBank 37.05 1 21.50%
3 UniCredit 10.62 1 6.17%
3 BNP Paribas 10.62 1 6.17%
Subtotal 172.30 3 100.00%

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  • 17 Jan 2017
1 SG Corporate & Investment Banking 770.06 2 16.80%
2 Goldman Sachs 656.16 2 14.32%
3 JPMorgan 527.28 4 11.50%
4 Emirates NBD PJSC 408.38 1 8.91%
5 Deutsche Bank 321.53 3 7.01%