Centrus advises on successful CPI and Fixed Rate listed public bond issues for Affinity Water

Centrus advises on successful CPI and Fixed Rate listed public bond issues for Affinity Water

On 15th November 2017 Affinity Water successfully launched and priced £120m of fixed and index-linked public bonds following a series of investor meetings in London and Edinburgh. The transaction comprised a 0.23% £60m CPI-linked bond with a 25 year maturity and a 2.699% £60m fixed coupon bond with a 16 year maturity.

The bonds will be used to fund capital expenditure for the remainder of the current regulatory period (“AMP6”) and into the next regulatory period (“AMP7”).

The spread achieved on the CPI element was very competitive and demonstrated both strong demand for CPI-linked assets and solid support for the issuer’s credit. Pricing on the fixed rate tranche ultimately tightened by 15-25bps from initial investor bid proposals.

Nilesh Patel, Treasurer at Affinity Water, commented that “Centrus provided invaluable guidance throughout the transaction, supporting us with key milestones from initial issuance strategy and bookrunner selection, right through to pricing and execution. Their advice enabled us to run a seamless deal process enabling us to minimise future interest costs in a more challenging regulatory environment” .

Affinity Water is owned by Allianz, HICL and DIF, and is the largest water-only supplier in the UK, providing on average 900 million litres of water each day to over 3.6 million people in parts of London and the south of England.

 

If you’d like to discuss your requirements in this area, please contact Robert St John.

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