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Yorkshire Water Services Limited completes £260m Class B bank and institutional debt refinancing

On 16th December 2015, Yorkshire Water Services (“YWS”), the water supply and treatment utility company servicing Yorkshire and parts of North Lincolnshire and Derbyshire, closed £260m of deferred draw Class B loan facilities with one bank lender and two institutional investors. Commonwealth Bank of Australia, Lloyds and HSBC acted as agents on the institutional loans. The bi-lateral facilities, with tenors of 10 to 20 years were made up of £135m floating rate instruments and £125m RPI-linked instruments.

Centrus provided financial advice to YWS covering the strategy and the economic evaluation of a number of proposals received from bank and institutional investors to refinance its outstanding £450m Class B bond which has a call in April 2017. The deferred draw nature of the facilities has allowed the company to take advantage of strong credit appetite and low real rates of interest in a cost effective manner.

Partner Geoff Knight, who led the Centrus team working on the transactions commented, “These bi-lateral loans have materially reduced refinancing risk for YWS while also diversifying the lender base and extending the duration of the Class B liabilities.”

Adrian Hunt, Group Treasurer at Yorkshire Water said, “We have achieved a good result having set a challenging timetable to complete this stage of the refinancing before year end. I am very pleased with the outcome and I would like to thank all of our partners, including our agent banks and other advisors for their professionalism and dedication in helping us to close these loans.”