With default a distinct possibility, Thames Water has made a frantic plea to creditors as it tried to shore up another round of liquidity.
This plea for £3bn has junior creditors shuddering. They say it is too expensive and too restrictive — not to mention that it would subordinate them in the creditor hierarchy should it come to pass and the company default.
Senior creditors offering the credit line argue that, unlike the junior creditors, they have done their due diligence and have the credit approvals to provide the financing in the speedy time that Thames needs it. The Class B creditors reject this claim.
Thames Water is laden with £19bn in debt, crumbling infrastructure, and facing multi-million pound fines from UK water regulator Ofwat.
Its credit rating is as far into junk as it's possible to go, after S&P cut the rating to C on its Class B debt.
This new loan that Thames wants to shoulder does not signify sound health to equity investors for growth, and Thames desperately need equity investors onside. They are expected to stump up billions if the company is going to get back on an even keel.
Taking on a prohibitively expensive loan now will only add to any feelings they have that injecting capital in to Thames Waters is throwing good money after bad.
Other UK water companies are not quite in the same financial dire straits as Thames, but almost all of them still need hefty equity investment over the next five year regulatory period, and all of them require lots of debt to replace creaky infrastructure with pipes and plants that work.
In short, they need the financial markets to like them. Thames's desperate plea for funds is making that more difficult.