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Centrus advises Yorkshire Water Services Limited on ground breaking £160m index-linked swap restructuring

On 5th June 2015, Yorkshire Water Services Limited (“YWS”), the water supply and treatment utility company servicing Yorkshire, and parts of North Lincolnshire and Derbyshire, England, completed the restructuring of £160m of long dated index-linked swaps. The re-structuring centred on the removal of mandatory breaks and involved the combined use of institutional investor demand for swap-backed assets and bank balance sheets.

Centrus provided financial advice to YWS covering the strategy and financial policy, the economic evaluation of the proposal, changes to the whole business securitisation financing platform documentation, the choice and implementation of the preferred solution and the detailed documentation phases.

Structuring banks for the institutional solution, Barclays (Lead) and BNP Paribas, were joined by Morgan Stanley in managing the swap restructuring process and acting as swap counterparties to YWS. Linklaters were legal advisors to the transaction and Deloitte were accounting and tax advisors to YWS.

Partner Geoff Knight, who led the Centrus team working on the transaction commented, “The removal of breaks on £160m of index-linked swaps completes the first phase of the company’s strategy to actively manage the liquidity risks posed by mandatory swap breaks. We would like to congratulate the company and all the parties involved in successfully concluding this complex and ground breaking transaction. At Centrus, the assignment drew upon our strategic expertise in debt capital markets, derivatives and corporate finance and highlights the value of our broad based advisory franchise.”

Adrian Hunt, Group Treasurer at YWS said, “I would like to thank all of our partners, including our banks and our various legal, accounting, tax and financial advisors for their dedication and skill in helping us deliver this important strategic transaction.”