Member

I am aware that many of the companies in this industry are beyond this level currently and the impact of my amendment would be to force them to reduce their leverage beneath this level. That would be achieved by requiring all profits to be retained in the company, with no returns to shareholders or debt holders outside the operating company, until that leverage ratio is beneath this 60% cap. I am also aware that many of the water companies have holding companies above them that have debt serviced by the water company operating profits via dividends or other means and potentially debt guarantees. This amendment would sever those debt guarantees and significantly reduce the security of holding company debt holders and shareholders over the operating companies. In debt market terms, they would have been primed; other interests have been given priority over the cash flows of the operating companies without their consent. It is an aggressive move, but one with plenty of precedent in debt markets.