Global bond manager Pimco has sold most of its debt holdings in Thames Water, the UK’s largest water and wastewater utility, as the company moves closer to a private sector rescue plan designed to avoid temporary nationalisation.
According to Sky News, Pimco—led by former Man Group chief Emmanuel Roman—has sold “hundreds of millions of pounds” of Thames Water debt in recent weeks to hedge funds including Apollo Global Management, Elliott Advisors, and Silver Point Capital. One insider said the sales represented “the bulk” of Pimco’s exposure to the utility’s £20 billion debt mountain.
A source close to Pimco said the firm took advantage of a rise in Thames Water bond prices, reflecting “growing optimism” that senior creditors, known as Class A lenders, could reach an agreement with regulators and the government to keep the company in private hands.
Thames Water, which supplies over 15 million customers across London and the Thames Valley, has been under intense financial pressure despite a £3 billion emergency loan agreed earlier this year. Half of that loan has already been drawn, securing operations until early 2026.
During the summer, Steve Reed, then environment secretary, had appointed restructuring specialists FTI Consulting to prepare contingency plans for a potential special administration of Thames Water. Such a move would see the government take temporary ownership of the company and assume its debt, an outcome the Treasury is keen to avoid given fiscal constraints.
Separately, Thames Water and Ofwat announced earlier in October a further deferral of the planned referral of the company’s Final Determination to the Competition and Markets Authority (CMA). The extension allows discussions on a market-led recapitalisation to continue “in the coming weeks,” according to both parties.
A spokesperson for the London & Valley Water consortium, representing senior creditors, said the update reflected “continued progress to develop a sustainable solution which will deliver improvements for Thames Water’s customers, employees and the environment.”
“We will continue to work at pace with all stakeholders,” the spokesperson added, aiming for an agreement that “avoids the unnecessary cost, risk and delay of a special administration.”
The developments suggest growing confidence that the struggling utility may secure a private-sector lifeline—averting a politically and financially costly state takeover.
