United Utilities Water draws £200m index-linked loan with European Investment Bank

08 June 2006

On 2 June 2006, United Utilities Water PLC (A2, stable; A-, stable) drew-down a £200m loan facility with the European Investment Bank ("EIB") in index-linked form. The loan is repayable in 2016 and has an effective real interest rate of approximately 2.25%, on the inflation adjusted principal.

The loan (which was signed in November 2004) supports UUW's £2.9 billion capital investment programme to 2010. The proceeds will be used to support projects in the investment programme that help improve the environment and water quality.

United Utilities has a long standing relationship with the EIB, the European Union's long-term financial institution, which stretches back to the 1970s. The EIB is the group's largest stakeholder, reflecting the bank's dedicated support for improvements in water supply, wastewater and electricity distribution infrastructure in the North West of England.

This loan brings to a total of £850 million, the amount of index-linked funding raised by the group. Index-linked funding now supports around 11.5 per cent of the group's regulated asset value.