Assured Guaranty UK Limited (AGUK)* announced that it has guaranteed principal and interest payments on a £75 million bond issued by Portsmouth Water Limited, a regulated water utility.
This issuance forms part of a wider financing package to fund the construction of the Havant Thicket Reservoir, the first new reservoir to be built in South East England since the 1970s. It will serve approximately 160,000 customers once completed, which is expected in 2029.
The 14-year CPI-linked bond was issued on 29 March 2023 and privately placed with two UK investors. As a result of the financial guarantee provided by AGUK through its Transferrable Custody Receipts (TCR) program, the TCRs are rated AA by S&P Global Ratings.
Suparna Dar, Managing Director, AGUK, commented:
"We are pleased to be able to provide Assured Guaranty’s financial guarantee to support funding for the construction of a key infrastructure project in the UK water sector, alongside a wider banking group and the UK Infrastructure Bank. We believe our long-term wrap provides a cost-effective solution to support major construction projects in the water sector over the coming years.”
Dominic Nathan, Senior Managing Director, AGUK, commented:
“The closing of this transaction represents our return to the primary market in the UK water utility sector, where we have been active continually in the secondary market in recent years. It takes Assured Guaranty’s total par underwritten in this sector close to £9.5 billion, reflecting our depth of experience and long-standing relationships with UK water utilities.”
AGUK guarantees timely payment of scheduled principal and interest throughout the life of the bonds, in accordance with the terms of its financial guarantee.
Assured Guaranty’s legal advisers on the transaction were Linklaters LLP. Portsmouth Water were advised by Centrus and Allen & Overy LLP.