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Thames Water has obtained support from three-quarters of its creditors for an emergency funding deal, which would give it a £3bn lifeline.
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Britain’s biggest water company said today that creditors holding more than 75% of its Class A debt – the least risky class of bonds in its debt pile – agreed to the deal.
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The 75% threshold is the minimum needed for the plan to be approved by a UK court. Thames Water is aiming for a court date on 17 December.
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The debt-laden utility hailed this as an “important milestone” and is hoping more bondholders will take part.
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Under the plan, Thames Water would initially get £1.5bn of funding with an annual interest rate of 9.75%, which the company says will keep it going until next October.
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Asian shares are down again, amid a strong dollar and concerns over the incoming Trump administration’s trade policies. Today, traders await key inflation data from the United States, which could be key to the Federal Reserve’s next interest rate decision.
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Japan’s Nikkei is down by 1.7% while Hong Kong’s Hang Seng index has slipped by 0.1% and South Korea’s Kospi slid by 2.6%.
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Over the past week, we’ve seen ‘Trump trades’ – traders betting on big government spending, lower taxes and higher tariffs once Donald Trump takes office. The dollar has jumped and Treasury yields rocketed since last week’s election.
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Markets are now seeing a 62% chance of an interest rate cut at the Fed’s next meeting in December, down from 77% a week ago and 84% a month ago, according to CME Group.
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Ipek Ozkardeskaya, senior analyst at Swissquote Bank, explained:
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US yields pushed higher and the dollar rally gained further momentum yesterday, as investors continued to surf on the idea that Donald Trump’s pro-growth policies and tariffs would boost inflation in the US and limit the Federal Reserve’s capacity to ease the monetary policy as much as previously anticipated. The US 2-year yield, for example, which best captures the rate expectations, is up by 85bp since the September dip, we could see a similar jump in the US 10-year yield.
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The CPI [consumer price index] Since Donald Trump was re-elected as President of the United States, the importance of data has risen again. The last thing the Fed wants is to panic and lose control of the situation, so the jobs report remains important to the Fed's policy direction, but the Fed's victory against inflation looks more fragile today than it did a month ago. It looks like. And that will support the US dollar.
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Of course, October's numbers don't tell us much about President Trump's impact on consumer prices. We'll have to wait a few months to see how President Trump affects the numbers. But the higher the number, the lower the expectations for a rate cut in December. And I have a feeling that today's numbers may not soothe dovish nerves. U.S. headline inflation is expected to rise from 2.4% to 2.6%, while core inflation is expected to remain stable around 3.3%, although still well below the Fed's 2% policy target. exceeds.
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agenda
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Noon GMT: Number of US MBA home loan applications last week
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1:30pm GMT: US inflation rate in October (forecast: 2.6%, previous: 2.4%)
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main events
thames water The company has been on the brink of collapse since it was described as “uninvestable” in March when shareholders refused to inject more cash.
The government is waiting for nationalization through a special administrative regime.
The Class A creditor group, which owes more than £12bn, said:
This is a decisive vote of confidence in the first phase of Thames Water's restructuring plan from a large group of creditors, including a significant number of long-term infrastructure investors. This shows that there is a real will to develop market-based solutions that avoid UK taxpayers bearing the costs of special administration.
The Group will work intensively with the company to ultimately secure the strategic capital and resources needed to rebuild it so that all involved can refocus on better serving customers and the environment. We provide our expertise to the company.
Introduction: Thames Water is supported by three-quarters of its creditors. Markets focus on US inflation
good morning. Welcome to our regular coverage of business, financial markets and the global economy.
thames water has received support from three-quarters of its creditors for an emergency funding deal that will provide it with a £3bn lifeline.
Britain's largest water company announced today that creditors holding more than 75% of its Class A bonds – the least risky class of debt in the company's debt pile – have agreed to the deal.
The 75% threshold is the minimum required for a plan to be approved by a UK court. Thames Water is aiming for a December 17 court date.
The debt-laden utility company hailed it as a “significant milestone” and hopes more bondholders will join.
Under the plan, Thames Water will initially receive £1.5 billion in funding at an annual interest rate of 9.75%, and the company will continue to operate until October next year.
Asian stocks are falling again on the back of a strong dollar and concerns about the incoming Trump administration's trade policy. Traders are now awaiting key inflation data from the United States, which could be key to the Federal Reserve's next interest rate decision.
Japan's Nikkei Stock Average fell 1.7%, Hong Kong's Hang Seng Index fell 0.1% and South Korea's Kospi Index fell 2.6%.
Over the past week, we've been seeing the “Trump deal.” Traders are betting on huge government spending, tax cuts and tariff increases. donald trump takes office. Since last week's election, the dollar has soared and U.S. Treasury yields have soared.
According to CME Group, the probability that the market will cut interest rates at the next FOMC meeting in December is now 62%, down from 77% a week ago and 84% a month ago.
Ipek OzkardeskayaA senior analyst at Swissquote Bank explained:
US yields rose yesterday as investors continued to surf the idea that President Donald Trump's pro-growth policies and tariffs would push up US inflation and limit the Federal Reserve's ability to ease monetary policy. , the dollar's appreciation gained momentum. It was predicted in advance. For example, the U.S. two-year bond yield, which best reflects interest rate expectations, has risen 85 basis points since September's plunge, and a similar rise could be seen in the U.S. 10-year bond yield.
CPI [consumer price index] Since Donald Trump was re-elected as President of the United States, the importance of data has risen again. The last thing the Fed wants is to panic and lose control of the situation, so the jobs report remains important to the Fed's policy direction, but the Fed's victory against inflation looks more fragile today than it did a month ago. It looks like. And that will support the US dollar.
Of course, October's numbers don't tell us much about President Trump's impact on consumer prices. We'll have to wait a few months to see how President Trump affects the numbers. But the higher the number, the lower the expectations for a rate cut in December. And I have a feeling that today's numbers may not soothe dovish nerves. While headline inflation in the United States is expected to rise from 2.4% to 2.6%, core inflation is expected to stabilize around 3.3%, still well above the Fed's 2% policy target. are.
agenda
-
Noon GMT: Number of US MBA home loan applications last week
-
1:30pm GMT: US inflation rate in October (forecast: 2.6%, previous: 2.4%)
