Macquarie asked Ares to take full writedown on Southern Water debt

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Southern water controlled by MacQuarie asked Ares Management and other lenders to debate £ 370 million, trying to allow new equity to flow directly to flow.

Negotiations are placed in one of America’s largest private capital firms in the center of funding, fighting another debt-loaded British water utility, as the water supply has provided emergency loan, including the US funds, such as Elliott Management and the silver spot.

Southern – which provides water and sewerage services, 4.7 ml of servicles in the south-east of England.

Investor’s own debt at the level of South Holding, which has approximately 370 million pounds, according to the company’s latest presentation. The debt sits on top of the capital structure and far from utility operating assets, making it risky for investors.

In 2021, Macquarie took a majority in the southern south. Australian Investor and Lenders are negotiating a compromise of partially written. According to people familiar with the discussions, Macquarie requirements are still too sharp.

The lawsuit for the whole gram was the opening position, adding people.

Ares, who wins about $ 550 billion in assets, became a lender, when in 2022 he acquired the debt business of the infrastructure of AMP. AMP became a creditor in 2018.

Southwater “Midco” lenders, including Caisse de Dépôt, can also resist grams in the future. These bonds sit in the Holding company between the operating company’s debt and bonds.

Macquarie, Ares, Southern Water and CDPQ refused to comment. WESTBOURNE CAPITAL did not respond to the comment request.

Southern finance is less pregnant than Thames Water, which is the greatest water usefulness in the UK and serves 16 million households. But the utility is very obligatory and has under pressure from the debt markets due to the potential of the loan rating and the violations of the debts.

Next to the recommended haircut, the South Owner Macquarie Assets Management is injected to 900 million pounds.

The purpose of the captivity is to allow Macquarie to enter all new money in the South Functioning company, not to use a part of a holding level.

The operating company regulated by the South Complex structure, a “Ringfreckenced” group, which is supposed to be protected in companies above stress, is still running about 70% of capital ratio.

After the lowering of Moody’s “junk” in November, the southern default leads to the southern and fights on a pile of more than 6 billion debt.

The injection of the shares has frozen several market concerns around the southern world of its bond prices. Its “Rating Clock” status was removed by Fitch Rating Agency.

At the end of last year, the utility borrowed 300 million pounds, selling senior bonds in its operating company with a group of fence at 7.75% annually. The difficulties of increasing the capital states that the Southern South used a private process, which was mainly aimed at the fence of bond sales.

The interest rates on bonds issued by the southern director are almost three times higher than the spending on borrowing.