Southern Water launching £600m bond sale
By Josh White
Date: Wednesday 12 Nov 2025
(Sharecast News) - Southern Water launched a bond sale of up to £600m on Wednesday, as it looked to manage its high debt levels and respond to regulatory and public pressure over environmental performance.
The utility, majority owned by Australian financial giant Macquarie Group, is marketing five-year and eight-year sterling-denominated notes, both initially priced around 230 basis points above comparable UK government bonds, according to Bloomberg, citing a person familiar with the deal.
It said the bonds were being issued through SW Finance I and were expected to receive ratings of Ba1 from Moody's, and BBB- from both S&P Global Ratings and Fitch Ratings.
Barclays, Rabo Securities and SMBC were reportedly leading the transaction, which was expected to price later on Wednesday.
Alongside the new issue, Southern Water launched a tender offer to repurchase £350m of sub-class A4 notes due in March 2026 at a price of 100.5p, with the offer set to close on 19 November.
The move came amid growing scrutiny of the UK's water industry over pollution and governance standards.
Last week, Ofwat blocked bonuses for executives at six water companies, including Southern Water and Thames Water, after identifying "serious pollution incidents" during the past financial year.
Reporting by Josh White for Sharecast.com.
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