Chris Green, group finance director at Northumbrian Water, said it was likely “at least one or two” more firms would release bonds soon.
He claimed Northumbrian’s £360 million 30-year bond, issued on Thursday 12 January, was three times oversubscribed. It offers 5.125 per cent interest.
“It is generally the case that when you kick off a new year, people feel more buoyant and confident,” he added.
On Tuesday 10 January, Wessex Water issued a £200 million 9-year bond at 4 per cent interest.
Nigel Hawkins, analyst, said low UK gilt yields and Eurozone turmoil made it quite a good time for utilities to borrow cheaply.
He added: “There is an expectation that utility companies will take advantage of the relatively benign environment to raise substantial sums of money.”
Analysts Citi recently reported that water companies were among the least risky investments in Europe, due to low regulatory risk and “solid financial structures”.