Money managers are buying up Thames Water bonds that are trading well below their face value, betting that any haircut from a potential restructuring will prove less painful than current trading levels indicate, according to people with knowledge of the matter.
The wager sees investors buy the operating company’s lowest-priced top-tier bonds, which trade at a discount of about 20% or more to the issuance price because of their lower coupon, the people said, asking not to be named. The popularity of the trade has helped the bonds outperform their higher-price counterparts in recent days.
