Southern Water’s debt downgraded to junk status by Moody’s

Southern Water’s construction of a 1km outfall pipe from Swalecliffe Wastewater Treatment Works in Kent. Photograph: Gareth Fuller/PA

Southern Water’s debt has been downgraded to junk status by the credit rating agency Moody’s in a decision that underlines the precarious state of the UK water industry.

Moody’s said Southern’s “history of material operational and financial under-performance” could imperil its plan, announced last month, to borrow £4bn from investors.