Rating firm Moody's downgraded Britain's Thames Water's corporate family rating (CFR) deeper into junk territory on Wednesday, the second time in two months, after raising doubts about the country's largest water provider securing new equity funds to stay afloat.
The CFR of debt-laden Thames Water has been downgraded to "Caa1" from "Ba2". In July it was downgraded to "Ba2", which is considered a junk reading, from "Baa3", which is an investment grade.
The company, which supplies a quarter of the UK population with water is in talks with creditors for short-term relief as it seeks to raise equity of 3.25 billion pounds ($4.33 billion) over the next five years.
A formal process to raise new equity will be launched in the coming weeks, Thames Water said on Friday.
"In the medium term, inability to attract new equity funding may ultimately lead to a creditor-led debt restructuring or one that is imposed as part of a special administration process," Moody's said.
($1 = 0.7511 pounds)
