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Tideway Funding

Financing model

  • First Specified Infrastructure Project Regulations project

  • Shareholders initially provided £1.3bn equity base (£750m loan, £550m equity)

  • Shareholder loan is subject to 8% coupon rate, to provide full return on full £1.3bn investment (effective rate 4.6%)

  • Model assumes shareholder loan converts to equity at 'System Acceptance' (2027)

Financing model breakdown

Chart: Illustrative gearing

Financing strategy

  • Maintain a low risk financing position, preserving the Baa1/BBB+ credit ratings and a strong liquidity position at all times​
  • “Equity first”: £1.3bn equity is funding the investment programme to start of tunnelling​
  • Leverage only rises at the back end of construction, hand-in-hand with progress on the delivery of the investment programme​
  • Debt programme combining inflation linked debt to match RCV growth with nominal issuance​
  • Pre-financing in order to increase liquidity where this is consistent with our overall cost of debt targets

Financing activity and sustainable finance

  • At 30 September 2024, we had total liquidity of £473.1m, comprising £313.1m of unrestricted cash and the £160m undrawn RCF. This, combined with expected revenue collections, provides liquidity significantly in excess of our 12-month target, including all liquidity required to Handover and System Acceptance

  • In September 2024, we entered into a £75m Liquidity Facilities Agreement aimed at covering the Liquidity Required Amount, a CTA requirement

  • £3.3bn long term debt raised (£3.8bn including accretion)
  • £160m RCF​: £75m Liquidity Facilities
  • 100% needs to System Acceptance
  • Refinancing from 2025 (EIB) and 2027 (bond)

September 2024

  • No distributions relating to the shareholders loan were paid in the six months to 30 September 2024 taking the shareholder loan balance to £960.1m

  • Our credit ratings were affirmed at Baa1 by Moody’s in June 2024 and BBB+ by Fitch in May 2024, both with a stable outlook.

  • Tideway has 18 green bonds totalling £1.8bn listed in the London Stock Exchange Sustainable Bond Market, two green PPs for £75m and £250m and a £160m Sustainability-Linked Revolving Credit Facility, all covered by a Second Party Opinion from S&P Global Ratings with Dark Green status​

  • Our annual Sustainability Report was published in June 2024

  • Index Linked debt as % of RCV
  • Gearing remains below the covenant trigger / default levels (70%/80%)
  • Index Linked debt as % of ​
    total debt
  • Interest coverage ratio remains well above the covenant trigger / default levels (1.30x / 1.10x)