Key Takeaway: Moody's downgraded Southern Water to junk status , citing financial and operational underperformance, compounding the broader issues facing the UK water sector. Southern Water Ltd’s credit rating was downgraded to junk by Moody’s , with a warning of potential further cuts due to its weak performance history and financial challenges. This downgrade impacts the company’s ability to raise the £4 billion in new debt and £650 million in equity required for its capital plans. The UK water industry is facing heightened scrutiny due to concerns over chronic leaks, sewage spills, and high-interest rates. Southern Water, which supplies over two million people in England, could face severe penalties from the regulator Ofwat , which may limit funds for essential upgrades. Following the downgrade, Southern Water’s 2026 bonds dropped 2.7 pence to around 85 pence on the pound. Despite the rating cut, Southern Water assured customers that services would continue unaffected, hig
Following Donald Trump's presidential election win, US mortgage rates have continued their upward trend. The contract rate for a 30-year fixed mortgage increased by five basis points to 6.86% in the week ending Nov. 8, marking the highest level since July. Over the past six weeks, rates have risen by 72 basis points, the most significant surge in two years.
This rise in mortgage rates aligns with the movement of Treasury yields, which have been influenced by investor expectations of higher inflation and budget deficits under the new administration. Consequently, the Federal Reserve may adopt a cautious approach to interest rate cuts in the near future.
The Mortgage Bankers Association (MBA) reported a decline in refinancing applications for the seventh consecutive week, the longest streak since April 2022. However, applications for home purchases saw a slight uptick. The MBA's weekly survey, encompassing over 75% of all US retail residential mortgage applications, reflects these trends.
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