Response to Moody’s ratings action

Today, South East Water received a credit rating downgrade from one of its two ratings agencies, Moody’s Ratings (“Moody’s”).

As a condition of its operating licence with the regulator, Ofwat, South East Water must maintain at least two investment grade credit ratings. The Board of South East Water is constructively engaging with Ofwat, the Company’s regulator, to agree certain commitments that will secure a return to compliance with its licence conditions. The commitments once agreed with Ofwat will be communicated.

The ratings action has resulted in SEW Finance Limited’s backed and underlying senior secured rating changing to Ba1 from Baa3 and assigned a Ba1 Corporate Family Rating (CFR) and Ba2-PD probability of default rating to South East Water. The ratings action relates to the fallout from two high profile outages and the continued resilience risk the company faces until its medium- to long-term investment programmes are completed.

South East Water maintains strong liquidity and a resilient capital structure. Moody’s has noted that the Company is expected to demonstrate solid financial metrics for the rating level.

Andrew Farmer, South East Water Chief Financial Officer, said: “South East Water is implementing a company-wide transformation following network incidents last year to improve our operational performance and deliver on our most important priority, which is a resilient supply network for our customers.

This will enable South East Water to deliver record levels of investment, with the support of customers across Kent, Sussex, Surrey, Hampshire and Berkshire, totalling £2.1 billion between 2025-2030.”

Any queries should be directed to press.office@southeastwater.co.uk(opens in a new tab).