Thames Water - comment

No standing by. Ahead of the referral to the CMA on Oct. 22nd, the creditor group has revamped its proposal to incorporate the fines that the regulator is morally wedded to. The £1bn value improvement over the previous plan will be taken out of creditors who are unable/unwilling to follow their rights, as the new plan will leave unaffected the economics of those who do invest. The new plan could allocate up to 90% of the new equity to the latter. To that end, and to make the math work for some, there has been a heavily PR-buttered cleansing this morning. Perhaps in return for the value improvement, the write-off is slightly Lower than we expected. Also, compared to our £1.8bn assumption in our recap table, the new super sr. debt commitment seems to have been split into a £1.25bn loan and a £1bn super sr. RCF, although this is likely not new. Otherwise, this proposal is - unsurprisingly - substantially unchanged from the previous plan.