Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
Moody's has placed Britain's Southern Water on a warning for a "junk" rating downgrade, just days after stripping Thames Water of its investment-grade status.
Key Points:
- Moody's Concerns: The rating agency cited UK regulator Ofwat's draft decision to limit customer bill increases and Southern Water's looming fines as primary concerns.
- Current Rating: Southern Water currently holds a Baa3 rating, the lowest investment-grade rung.
- Regulatory Decision: Ofwat's draft determination prevents Southern from raising bills as much as requested, impacting its investment program funding.
- Fines and Penalties: Southern Water faces substantial fines, including at least £35 million in "Outcome Delivery Incentive" penalties, with potential ongoing annual fines of £19 million to £60 million if improvements are not made.
- Pollution Reduction: Southern Water is mandated to reduce pollution incidents by 81%, significantly more than other water companies, which face less than a 30% reduction requirement.
- Funding Needs: Moody's estimates Southern Water needs to raise £4.5 billion in debt and equity by the end of the decade. Maintaining a leverage ratio of 70% requires over £800 million in net equity contributions, with no certainty of investment from its majority owner, Macquarie.
Company Response:
Southern Water, majority-owned by Australian investment firm Macquarie, stated that Moody's warning has "no material impact" on its operations, highlighting over £850 million in available liquidity.
Next Steps:
Moody's will conclude its rating review after Ofwat releases its final price determination plan in December but may act sooner if substantial new information arises.
Conclusion:
Southern Water's financial stability is under scrutiny as it faces regulatory restrictions and significant penalties, casting doubt on its ability to maintain its current rating without substantial new equity and debt funding.
Comments
Post a Comment