Ratings

The group has a contractual relationship with both Moody's Investors Service (Moody's) and Standard & Poor's Ratings Services (S&P) for the provision of rating information.

Management of the group meets these agencies at least annually and shares with them the group's latest financial projections and business plan assumptions.

Senior unsecured debt obligations of the issuers are rated as follows:

  Moody's Standard & Poor's
United Utilities PLC Baa1/stable BBB+/stable
United Utilities Water Limited A3/stable A-/stable

Latest rating announcements

Headline Detail

S&P Global upgrade UU’s credit ratings 

On July 25, 2017, Standard & Poor’s Global Ratings (S&P) announced that it has raised its long-term corporate credit and senior unsecured debt ratings on United Utilities Water Ltd. (UUW) to 'A-' from 'BBB+'.
S&P also raised to 'BBB+' from 'BBB-' its long-term corporate credit rating on UUW’s parent United Utilities PLC (UU). At the same time, S&P raised its rating on UU's senior unsecured debt to 'BBB+' from 'BBB-'.
The outlook on both entities is stable.

S&P revised UU's credit ratings outlook to positive 8 September 2015

On 8 September 2015, Standard & Poor's Ratings Services (S&P) announced that the outlook on United Utilities Water Limited (UUW) and United Utilities PLC (UUPLC) ratings have been revised to positive from stable. S&P also affirmed UUW's 'BBB+' long-term and UUPLC's 'BBB-' long-term credit ratings.

S&P state that the outlook revision reflects the potential for a positive rating action on UUW if the group is able to reach and maintain stronger credit metrics of funds from operations (FFO) to debt of above 11%. S&P consider that there is potential for UUW to improve its metrics if it can successfully deliver on cost savings and efficiencies required from its relatively tough total expenditure (totex) allowance, given by the regulator Ofwat, for the current regulatory period, AMP6 (2015-2020).

Moody's affirms UU's credit ratings 3 February 2015 Following UU's announcement that it accepted Ofwat's final determination of price controls for the period 1 April 2015 to 31 March 2020, on 3 February 2015 Moody's affirmed the A3 ratings of UUW and Baa1 ratings of UU PLC, both with a stable outlook.
Short term ratings withdrawn at UU's request Following the termination of UU’s dormant Euro Commercial Paper Programme towards the end of 2014, both Moody’s and S&P have withdrawn their short term ratings for UUW and UU PLC, at UU’s request.
S&P revised UU's credit ratings outlook to stable 17 November 2014

On 17 November 2014, Standard & Poor's Rating Services (S&P) announced that the outlook on UUW and UU PLC has been revised to stable from positive. S&P also affirmed UUW's 'BBB+' long-term and UUPLC's 'BBB-' long-term credit ratings.

Following Ofwat’s publication of draft determinations for the 2015-2020 regulatory period, which S&P viewed as ‘challenging’, S&P believe that UU’s headroom in its cash flow-based ratios will reduce. As a result, in S&P’s opinion, UU will not achieve the threshold required for a rating upgrade over the two-year rating horizon.

S&P affirms UU's credit ratings, outlook revised to positive 17 December 2012

On Monday 17 December 2012, Standard and Poor's Ratings Services (S&P) announced that it was revising its outlook on United Utilities PLC (UU PLC) and United Utilities Water PLC (UUW) to positive from stable. S&P also affirmed UU's 'BBB-' long-term and 'A-3' short-term credit ratings and UUW's 'BBB+' long-term and 'A-2' short-term credit ratings.

S&P state that the outlook revision reflects its opinion of steadily increasing headroom in UU's Standard & Poor's-adjusted credit metrics in the current 2010-2015 regulatory period, and the possibility that it may upgrade the companies in the current regulatory period if the current trend of financial outperformance continues. The positive outlook is further supported by S&P's view of UU's strong focus on improving its regulatory measures of operational performance and its almost exclusive focus on the low-risk, regulated UK water sector.

S&P resolves CreditWatch 28 January 2010

On 28 January 2010, Standard & Poor's announced that it was lowering United Utilities Water PLC's long term issuer credit rating to BBB+. The outlook is stable. United Utilities Water PLC's short term credit rating is unchanged at A-2.

At the same time, in line with its criteria on regulatory ring-fencing risk for UK utility holding companies, Standard & Poor's has lowered United Utilities PLC's long term issuer credit rating to BBB- and short term credit rating to A-3.

Moody's affirms UU credit ratings 21 January 2010 Following UU's announcement that it was accepting Ofwat's final determination of price limits for the period 1 April 2010 to 31 March 2015, on 21 January 2010 Moody's Investors Service affirmed the Baa1/P-2 ratings of United Utilities PLC and A3/P-2 ratings of United Utilities Water PLC, all with a stable outlook.
S&P 28 July 2009 Following the regulator's draft determination for 2010-2015, Standard & Poor's Rating Services, a division of The McGraw-Hill Companies, has placed its A- long-term issuer credit rating of United Utilities Water PLC and its BBB+ long-term issuer credit rating of United Utilities PLC on CreditWatch with negative implications. At the same time Standard & Poor's affirmed the A-2 short-term corporate credit ratings of United Utilities PLC and United Utilities Water PLC.
United Utilities credit rating 07 June 2007  United Utilities announced its preliminary financial results for the year ended 31 March 2007 on 5 June 2007. The announcement referred to the initiation of the sale process of United Utilities Electricity PLC and the consequent review of the group's capital structure and setting of a target credit rating for United Utilities Water PLC that best mirrors the water regulator's assumptions.

Following this announcement, Moody's Investors Service Ltd. has on 5 June 2007 placed on review for possible downgrade the A3 long-term ratings of United Utilities PLC and the A2/Prime-1 ratings of United Utilities Electricity PLC and United Utilities Water PLC. On 6 June 2007 Standard & Poor's Rating Services, a division of The McGraw-Hill Companies, Inc., placed its A senior unsecured debt and A-1 short-term corporate credit ratings on United Utilities Water PLC and United Utilities Electricity PLC and its A- senior unsecured debt and A-1 short-term corporate credit ratings on United Utilities PLC on CreditWatch with negative implications.

S&P 02 April 2007  Monday, 2 April 2007 -- Standard and Poor's Ratings Services (S&P) raised the short-term and long-term credit ratings of United Utilities PLC, and its subsidiaries, United Utilities Water PLC and United Utilities Electricity PLC by one notch.

Senior unsubordinated debt obligations of the issuers are rated by S&P as follows:

  • United Utilities PLC = A -/ Stable/ A1
  • United Utilities Water PLC = A / Stable/ A1
  • United Utilities Electricity PLC = A / Stable / A1
S&P 28 July 2003 BULLETIN: United Utilities Announces Planned £1 Billion Rights Issue LONDON (Standard & Poor's) July 28, 2003 Standard & Poor's Ratings Services said today that its ratings on U.K.-based multi-utility United Utilities PLC (A-/Positive/A-2) remain unchanged, following its announcement that it intends to raise about £1 billion in a two-stage, deeply discounted, non-underwritten rights issue. The issue has been designed so that equal amounts of equity (about £500 million) will be raised at each stage if all the rights are taken up. The first stage of the issue is scheduled to close in September 2003 and the second stage in June 2005. The issue will, if successful, strengthen United Utilities' capital structure. As the rights issue has been priced and has not been underwritten, execution risk will be linked to movements in United Utilities' share price and will be greater for the second stage proceeds given the long lead-time before this stage closes. The positive outlook on United Utilities is based on a financial profile that is strong for the 'A-' rating. It is expected, however, that, despite the rights issue, United Utilities net debt will increase given the company's large, mandated capital expenditure program and high dividend payout policy. Any potential rating upgrade for United Utilities will be considered in light of the regulatory outcome for the period 2005-2010, to be announced in 2004. Analyst e-mail addresses: peter_kernan@standardandpoors.com daniela_katsiamakis@standardandpoors.com infrastructureeurope@standardandpoors.com Contacts: Peter Kernan, London (44) 20-7826-3618; Daniela Katsiamakis, London (44) 20-7826-3519
S&P 26 June 2003 U.K.-Based Multi-Utility United Utilities PLC 'A-/A-2' Ratings Affirmed; Outlook Positive LONDON (Standard & Poor's) June 26, 2003 Standard & Poor's Ratings Services said today it affirmed its 'A-' long-term and 'A-2' short-term corporate credit ratings on U.K.-based multi-utility United Utilities PLC and it subsidiaries, United Utilities Water PLC and United Utilities Electricity PLC. The outlook is positive. The ratings reflect the predominance of stable, regulated cash flows from the company's monopoly businesses combined with an adequate financial profile. The regulated utilities, United Utilities Water and United Utilities Electricity, are supplemented by growing support services businesses. "Although the financial profile is strong for the 'A-' level, the ratings are constrained at this level by the company's large, mandated capital expenditure program, particularly on the water side of the business, the looming regulatory review, and the company's high dividend payout policy," said Standard & Poor's credit analyst Anthony Flintoff. United Utilities has a consistent and coherent corporate strategy, which it has managed to deliver in recent years. The company remains a solid performer in its core utility businesses in northwest England, where it generally exceeds its regulatory and operational targets. At the same time, it is nurturing its support services businesses to the point where they are becoming important contributors in their own right and adding diversity to the group. United Utilities is run conservatively and management has a prudent approach to risk management. United Utilities' regulated water and electricity distribution businesses remain on track to meet or exceed the operating and capital expenditure targets set in 1999 by its regulators, the Office of Water Services and the Office of Gas and Electricity Markets. The company forecasts it will achieve operating expenditure efficiencies of £480 million in the five-year period to April 2005, £80 million better than the target set by the regulators. As with all water and electricity utilities, United Utilities faces some uncertainty over revenue levels resulting from the next periodic price review, effective from April 1, 2005. The regulated activities are supplemented by the growing support services activities that comprise infrastructure management, business process outsourcing, and telecommunications activities. These contributed 41% of United Utilities' turnover in fiscal 2003 and 10% of earnings before interest and tax. "United Utilities' financial profile is acceptable for the current rating level," said Mr. Flintoff. "Nevertheless, the company's financial profile will gradually deteriorate if it continues its policy of a high dividend payout ratio when it has a large mandatory capital expenditure program." The positive outlook on United Utilities is based on a financial profile that is strong for the 'A-' rating and the potential for greater cash flow certainty once an indication of the regulatory outcome for the period 2005-2010 is received in 2004. An upgrade of the rating is unlikely should United Utilities face an adverse regulatory outcome, although Standard & Poor's expects the company to reassess its dividend policy in light of that outcome and the ongoing capital expenditure requirements. The rating and outlook anticipate continued strong operational and regulatory performance from the company, and a continuation of the current corporate structure and strategy. Contact: Anthony Flintoff, London (44) 20-7826-3874; anthony_flintoff@standardandpoors.com Daniela Katsiamakis, London (44) 20-7826-3519; daniela_katsiamakis@standardandpoors.com Peter Kernan, London (44) 20-7826-3618; peter_kernan@standardandpoors.com