Centrus advises Yorkshire Water on the refinancing of £95m HoldCo facilities

Transaction Overview

Yorkshire Water is a water supply and waste water treatment company serving the Yorkshire and Humber region. It treats and supplies approximately 1.3 billion litres of drinking water and collects, treats and returns approximately 1 billion litres of wastewater safely back to the environment every day.

Yorkshire Water has refinanced its HoldCo £65m term loan facility and £30m RCF held by Kelda Finance (No.2) Limited, which were signed in 2015 with new 7-year and 5 year extendable facilities respectively.

To facilitate a future where all facilities at this level will be on the same terms, the opportunity was taken on this refinancing to introduce a common terms agreement for these facilities.

Interview with David Gregg, Head of Corporate Finance at Yorkshire Water

Centrus Solution

Given the improved credit environment for UK Water holding companies’ credit margins, Centrus ran a competitive process introducing new lenders to supplement the existing providers.

A Commons Term Agreement was established with the new lenders, Intesa Sanpaolo and Bank of China, not only to refinance the existing 2015 facilities but to facilitate, for the benefit of all parties, all HoldCo borrowings to be under common terms in the future.

Added Benefits

Centrus managed a process that allowed the company through introducing new lenders, to refinance its facilities on similar terms to those achieved in 2015, and as a result, create a new benchmark for subsequent refinancings at the HoldCo level. Bank of China, already a relationship bank, has increased its investment into one of the largest water utilities in the UK. Intesa Sanpaolo has become a new relationship bank, making its first investment into the group.

“I am delighted that we achieved this positive outcome, with efficient pricing and the introduction of a common terms platform. We would like to thank Centrus and Linklaters for their expertise, advice and support on this transaction.”

David Gregg, Head of Corporate Finance – Yorkshire Water

“Centrus is very pleased to have worked with Yorkshire Water, Intesa Sanpaolo and Bank of China on this financing, which has developed existing banking relationships and introduced new lending relationships to support Yorkshire Water.

This transaction reflects the value of the ongoing relationship between Centrus and Yorkshire Water. Centrus’ insight into Yorkshire Water’s business and requirements has delivered a successful outcome for all parties.”

Scott Wilsher, Senior Associate – Centrus

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