In the first bid of its kind, Clifford Chance partners Steve Curtis and Alan Inglis are advising Citibank and RBS on the financing of Glas Cymru's £1.8bn offer for Welsh Water.
The bid is being financed wholly by bond debt, with only a nominal amount of equity.
Regulated utility providers in the UK have struggled since privatisation to keep shareholders happy, and share prices have been weak. But the one thing the regulated businesses do boast is a regular flow of income from customers paying bills quarterly, making them a prime target for securitisation, but traditional securitisation procedures are yet to be adapted to the regulated industries. The bonds are expected to get good grades by the rating agencies.