'Even Puerto Rico paid its bill': Thames Water creditor hints that backers are safe

The largest creditor to the struggling Thames Water has said it is confident it will not lose money, joking that the UK was comparable to Puerto Rico, which paid lenders to its water company despite a crippling debt crisis.

- Jasper Jolly

Dominic Frederico, the boss of US insurer Assured Guaranty, suggested that the UK government would not impose losses on creditors. The company - with an exposure of $2.4bn (£1.8bn) to Thames Water's bonds - was "well protected in terms of the legal structure", he told investors on a call on 8 August. "The joke I make internally, and I'll put it out here over some criticism, is that even in Puerto Rico's case, they paid the water bill," he said. "So I'm assuming the UK government will do the same."

In 2014 in Puerto Rico, a US territory, the biggest municipal default in modern history began. Its water company debts were not hit, and investors' returns were preserved.