Centrus advises Yorkshire Water on restructuring index linked derivatives with mandatory breaks in 2023

Centrus continues its longstanding relationship with Yorkshire Water with the successful execution of mandatory break extensions across £72.4m notional of the inflation linked swap’s portfolio with mandatory breaks in 2023. This completed the extensions of the 2023 mandatory breaks portfolio with a total notional of £151.5m. The total index-linked swap portfolio of c£1.29bn is used to hedge long term interest rate risk in the business.

Multiple solutions were followed to effectively utilise the most efficient bank and institutional capital to deliver the optimal result for Yorkshire Water. The outturn result extends mandatory breaks between 5 and 17 years to limit future concentration risks. This was achieved at competitive pricing and without the use of maturity extensions.

In now addressing the majority of the remaining mandatory breaks in their derivatives portfolio Yorkshire Water have again illustrated their proactive and prudent risk management approach to addressing mandatory breaks well in advance of due dates and with strong continued support from its relationship banks and investors.

“We are really pleased to have delivered on our commitment to manage mandatory breaks on our derivatives portfolio in a timely and efficient manner and I would like to thank our counterparties and our advisors, Centrus, for delivering a great result for the Yorkshire Water business.”

David Gregg, Head of Corporate Finance – Yorkshire Water

“We are delighted to have worked with our long-term client, Yorkshire Water, to deliver pragmatic and efficient solutions to the mandatory breaks and in a way that has worked well for all parties.”

Geoff Knight, Managing Director – Centrus

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