Moody’s revises Severn Trent view to stable

Moody's Investors Service said it affirmed the A3/P-2 ratings of Severn Trent Water Ltd. and the A3 ratings of Severn Trent Utilities Finance plc, whose debt is guaranteed by Severn Trent Water.

The agency also affirmed the Baa1/P-2 ratings of Severn Trent plc (Severn Trent).

The outlook on all ratings was changed to stable from negative.

Moody’s said the action reflects its expectation that Severn Trent's consolidated credit metrics will stay in line with the guidance for the current A3/Baa1 ratings during the rest of the current five-year regulatory period 2015-20 (AMP6). Moody's ratio guidance includes net debt to regulatory capital value (RCV) below 68% and adjusted interest cover not materially lower than 1.6 times.

These figures are in line with Moody's published ratio guidance for other U.K. regulated water utility groups such as United Utilities Water Ltd. (A3 stable) and Wessex Water Services Ltd. whose financing subsidiary Wessex Water Services Finance plc is also rated A3 with stable outlook.

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