Proactive Investors - Britain’s largest water supplier Thames Water’s ongoing debt crisis has reportedly caused significant financial losses for a Canadian state-backed export agency.
Citing “investors familiar with the trades”, the Financial Times reported that Export Development Canada (EDC) has offloaded millions of dollars worth of loans it made to the utility at a steep discount.
EDC lent hundreds of millions of dollars to Thames Water between 2018 and 2022 in order to support the public sector pension fund Ontario Municipal Employees Retirement System's (Omers) investment in the utility.
Since then, Thames Water has encountered a spiralling debt crisis and has failed to keep up with interest repayments.
Rating agency Moody’s downgraded the utility’s debt to junk status in July due to its “weakening liquidity position” and the potential for debt covenants to be breached.
S&P followed with its own downgrade to junk earlier this month.
In May, it was reported that Thams Waters’ bonds were worth just 5.8p on the pound.
Omers, which is Thames Water's largest shareholder, recently valued the company as “worthless” as it wrote down its 31.7% stake to zero.
Thames Water’s debt pile is estimated to be around £18 billion. The utility faces collapse if a comprehensive refinancing deal is not struck.