Not-for-profit Welsh Water(Dwr Cymru) has raised 拢600m through a new bond issue that will help finance its capital investment programme.
Its first bond issue for three years, and of the largest in the 海角视频 bond market this year, carries a fixed interest rate for bond holders of 5.75% - which is only 0.138% above the 海角视频 Government鈥檚 benchmark gilt rate. The sustainability bond has a 20-year term.
Welsh Water鈥檚 net debt - both bonds and other borrowings - amounts to 拢4.3bn. Its bonds account for 拢3.3bn of the total. Its gearing against its capital value of 拢7.5bn, has been reducing in recent years and now stands at 60% compared to 93% back in 2021. The company has one of the lowest debt to regulatory asset value levels of any 海角视频 water company.
Read More: Welsh Water launches 拢750m outsourced procurement tender
Read More:Welsh Government forecast to miss new social housing target
As well as being used to finance the company鈥檚 investment plans for its next five year regulatory period, the proceeds from the bond issue will also be utilised to refinance existing debt.
For 2025-2030 the company said it has put forward a record investment package of 拢4bn, with 拢2.5bn to improve the environment.
Mike Davis, Welsh Water鈥檚 chief financial officer said: 鈥淎fter a three year absence from the market, this bond issue confirms Welsh Water鈥檚 position as a premier credit in the water sector. It is great to see such a strong interest from investors in the company during what is a challenging time for the 海角视频 water industry.
鈥淲e have ambitious plans for the next five years to invest a record 拢4bn to improve our services and protect the environment.
鈥淭he money raised will be a key part of our plans for the future, so that we can deliver high quality services for our customers through continuous improvements.鈥
Welsh Water鈥檚 index linked bonds and debt are linked to the retail prices index measure of inflation. With inflationary pressures over the last few years that did see its exposure rise to a high of around 13.5% last spring, but has since fallen back sharply as inflationary pressures have eased - although Welsh Water does deploy hedging through swaps.
Welsh Water serves three million people across most of Wales, as well as having customers in Herefordshire. Its activities have an annual 拢1bn impact on the Welsh economy. It directly employs almost 4,000 and supports a further 5,000 jobs through suppliers and contractors.
