Liquidity Extension Update relating to Additional Super Senior Issuer Funding
Background
In 2025, Thames Water Utilities Limited ("TWUL") entered into a super senior facility (the "Facility") with its subsidiary, Thames Water Super Senior Issuer plc (the "Super Senior Issuer"). An initial £1.5bn was made available under the Facility. TWUL and the Super Senior Issuer have the ability to raise a further £1.5bn under the Facility, in two tranches each of £750m (the “Accordion”), subject to satisfaction and/waiver of relevant conditions precedent. These include, amongst other things, that a supported lock-up agreement (“Supported LUA”) is in place in respect of a second restructuring plan (“RP2”) and that the CMA Reference Decision Condition[1] is satisfied.
As previously announced, TWUL and the Super Senior Issuer have since secured commitments of a further £823m (being (i) the first £750m tranche of the Accordion plus (ii) a shortfall amount of c. £73m[2] (the “Deferred Commitments”)), bringing the total amount of commitments secured under the Facility to £2.323bn (of which (i) £2.25bn is funded and (ii) c.£73m is committed but deferred).
TWUL continues to work closely with stakeholders to secure a market led solution, and following consultation with its creditors, hereby announces that the Super Senior Issuer will today launch a process to allocate the second tranche of the Accordion. The amount of the second tranche of the Accordion to be allocated will total c.£677m (which, when added to the amount of the Deferred Commitments which have already been allocated, will equal £750m (the “Accordion Amount”)) (the "Accordion Allocation Process"). Upon successful completion of the Accordion Allocation Process, the total amount of commitments secured under the Facility is expected to be £3bn.
The launch of the Accordion Allocation Process is the start of an administrative process to allocate the Accordion Amount only. Funding of the Accordion Amount remains subject to the satisfaction and/or waiver of relevant conditions precedent, some of which, as at today, have not yet been satisfied and/or waived in full and remain out of the Super Senior Issuer’s control, including having a Supported LUA in respect of RP2.
Terms used but not otherwise defined have the meanings given to them in the Accordion Funding Letter (as defined below).
Accordion Allocation Process
Creditors who wish to participate in the Accordion Allocation Process are encouraged to review and complete the funding letter (the “Accordion Funding Letter”) which will shortly be made available (together with other documents related to the Accordion Allocation Process) by Kroll Issuer Services Limited (the “Information Agent”) at https://deals.is.kroll.com/thameswater-accordion.
The Accordion Funding Letter contains further details as to (i) creditors’ entitlements to participate in the Accordion Allocation Process; (ii) how creditors can elect to participate in the Accordion Allocation Process; and (iii) how Accordion commitments will be allocated by the Super Senior Issuer.
An Eligible Additional Super Senior Funding Participant who elects to provide Accordion funding may still be allocated zero Accordion funding commitments if the entire available Accordion funding is taken up by Eligible Additional Super Senior Funding Participants who have a prior allocation right (in accordance with the terms of the Super Senior Issuer Intercreditor Agreement).
The Accordion Allocation Process has an election deadline of 5:00 p.m. (UK time) on 30 July 2026 by which time creditors must have submitted a completed Accordion Funding Letter and provided all required information, confirmations and documents in order to participate in the Accordion Allocation Process. Creditors should contact the Information Agent at thameswater@is.kroll.com with questions on how to complete and submit the Accordion Funding Letter.
STAKEHOLDERS ARE ENCOURAGED TO REVIEW THE ACCORDION ALLOCATION PROCESS DOCUMENTS IN DETAIL THEMSELVES (COPIES OF WHICH ARE AVAILABLE AT HTTPS://DEALS.IS.KROLL.COM/THAMESWATER-ACCORDION) AND SEEK THEIR OWN LEGAL AND FINANCIAL ADVICE[3] SHOULD THEY HAVE ANY QUERIES IN RELATION TO THEIR CONTENTS.
- This is a condition to the Accordion Facility and requires TWUL to have decided to ask its economic regulator, Ofwat, to refer its Final Determination to the Competition and Markets Authority (CMA) for a re-determination. TWUL announced its decision to do so on 14 February 2025 here: https://www.londonstockexchange.com/news-article/AW14/twul-referral-of-final-determination-to-cma/16899296. The most recent announcement in relation to the deferral of the making of the reference was made on 21 October 2025 and can be found here: https://www.londonstockexchange.com/news-article/AW14/cma-reference-deferral-update/17288549.
- The shortfall amount is equal to the undrawn amount under the first tranche of £1.5bn, which arose as a result of commitments being deferred pursuant to the terms of the Second Consent Request: https://www.londonstockexchange.com/news-article/AW14/second-super-senior-funding-waiver-consent-request/17009385
- Creditors can contact TWUL to receive details of existing creditor groups and their advisors.