United Utilities is testing the market’s appetite for water companies with the first bond issue since peer Thames’ parent company defaulted on its debt last month.
North West supplier sought £300 million due in through a long-term bond issue and received applications for double that amount
Demand was more than £725 million with the interest rate coupon lowered to 115 basis points over UK gilts due to the demand.
United Utilities has tapped the bond issue three times this year with both raised sterling and euro-denominated debt.
Thames Water by contrast is facing possible nationalisation due to its debt problems.
Last week its largest shareholder wrote off the value of its equity stake in parent company Kemble, saying it was worthless.
Ratings agency Moody’s warned of a “contagion risk” for the sector in the event of a special administration at Thames.