Southern Water’s credit outlook improved after Moody’s Ratings and S&P Global Ratings revised their assessments, citing operational performance gains and reduced leverage.
Moody’s upgraded Southern Water’s outlook to positive from stable while affirming its Ba1 rating. The agency highlighted ongoing degearing, with net debt to regulatory capital value declining to around 66% as of March 2026. S&P revised its outlook on the company’s BBB- senior secured debt from negative to stable, also maintaining the BBB- rating. Both agencies pointed to operational improvements during the AMP8 regulatory period, noting performance above sector averages on key metrics.
The upgrades follow Southern Water’s £300 million equity commitment announced on June 22, 2026, bringing total equity funding for the AMP8 period to £1.2 billion. Asterion Industrial Partners provided the majority of the new equity investment. S&P expects funds from operations to debt to strengthen toward 7% by 2029.
Moody’s cited the Competition and Markets Authority’s March 2026 redetermination, which increased cost allowances, as a contributing factor. Fitch Ratings had previously upgraded Southern Water’s senior secured debt to BBB with a stable outlook on July 28, 2026.
Southern Water’s Chief Financial Officer Stuart Ledger said the ratings actions reflect "important independent recognition of Southern Water's improving operational performance and of the significant long-term support provided by our shareholders."
