A wave of acquisitions in the U.K. water utility sector is expected to lead to at least two whole business securitizations. "It's certainly more excitement than the water sector has ever seen," notes one London-based utilities analyst. It is difficult to say when these deals will come to market, note analysts, because they are so complex and are structured at a tortoise's pace.
Anglian Water, the holding company for Anglian Water Services (AWS), is expected to be sold to WestLB for about £900 million. WestLB has already announced its intention to securitize the holding company. AWS was securitized last year. Southern Water is to be securitized once Vivendi Environnement and RBS Capital Markets finalize the purchase of its parent company First Aqua. That deal will be arranged by RBS and Citigroup/Schroder Salomon Smith Barney.
Analysts also expect Northumbrian Water to be securitized once its parent company Suez sells it. As of press time last Thursday, a number of financial buyers were interested in Northumbrian, which is expected to go for E3.5 billion. Another potential deal could come from Wessex Water, which last year was bought by YTL, a Malaysian company. However, one analyst says he believes that deal is "dead in the water."