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20 July 2015

USS completes investment in Yorkshire Water inflation linked swaps

Universities Superannuation Scheme Limited (USS) has participated in a significant inflation linked swap restructure of Yorkshire Water’s inflation linked swaps.

Under the terms of the arrangement USS has purchased long-term, inflation linked listed Notes from an SPV, Aysgarth Finance. The restructure has allowed for the removal of the mandatory breaks from the swaps, thus reducing Yorkshire’s liquidity risks. The Notes will reach final maturity in 2063.

Ben Levenstein, Head of Private Debt and Special Situations, Private Markets Group at USS Investment Management Ltd, said:

“This is an exciting transaction for USS and we are delighted to have completed this with Yorkshire, one of the largest and best performing companies in the water sector. Long-term, inflation linked assets are well suited to USS given the inflation linked nature of our liabilities. USS’s Private Markets Group is an experienced investor across the capital structure within regulated sectors in the UK and very well positioned to provide such bespoke financing solutions.”

Adrian Hunt, Group Treasurer for Yorkshire Water said:

“USS understood our requirements for the swap restructuring, and were able to align these with its own risk and return requirements and work with us to deliver an efficiently executed transaction.”