Northumbrian Water announces group refinancing

11/05/2004

Northumbrian Water Group plc (the Group) announced that Northumbrian Water Limited (Northumbrian Water), the Group’s water and waste water subsidiary, has completed the securitisation of the cash flows received from the Environment Agency in respect of its Kielder operating agreement.

The net proceeds of £212.1 million will be used to refinance the remaining short-term debt advanced at the time of the Group’s flotation last May.

The transaction does not have any impact on either the ownership or operation of the Kielder scheme.

In addition, the European Investment Bank (EIB) has reviewed the terms of its facilities with Northumbrian Water in the context of the recent credit rating reviews of that company by Fitch (BBB+, stable outlook), Moody (Baa1, stable outlook) and Standard & Poor (BBB, positive outlook).

As a consequence, the existing EIB loans will remain in place and the Group is now in a position to cancel the remainder of the back-up facilities put in place at the time of the acquisition.

Group Finance Director Chris Green said “We are very pleased to announce the successful completion of the Kielder securitisation. Proceeds from the transaction will be used to refinance the remaining short term debt acquired at the time of the Group’s flotation in May 2003.

“This transaction together with the EIB decision significantly strengthens the debt profile of the Group ahead of the next regulatory period.”