Bonds could flow as CKI eyes Northumbrian Water

01 Jul 2011

Northumbrian Water’s bonds widened slightly on Monday and Tuesday, after Cheung Kong Infrastructure Holdings said on Monday that it was assessing a potential cash offer for the UK utility. But bond investors are at least as likely to welcome a takeover as fear it.

Like all UK utilities, Northumbrian Water Group’s operating companies are regulated, so have to maintain their ratings at a level that is comfortably investment grade. For the water industry, this is interpreted to mean high triple-B.

Northumbrian Water Ltd is rated Baa1/BBB+/BBB+ (all stable), while Northumbrian Water Finance Plc, ...

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