UU accepts AMP7 package UU has accepted Ofwat’s PR19 Final Determination package for AMP7. As a fast tracked company, acceptance is in line with our expectations. Guidance on credit ratings given UU intends to maintain the credit rating for United Utilities Water at/above A3 (Moody’s) and BBB+ (S&P). Current ratings are A3 stable (Moody’s), A- negative outlook (S&P), and UU expects an announcement from S&P next month. AMP7 dividend policy of CPIH growth, and no cut – POSITIVE UU has indicated that in line with its AMP6 dividend policy of RPI growth, the dividend for 2019/20 is expected to be 42.6p (vs our estimate of 42.52p), with a target of CPIH growth across AMP7, and no cut on entering AMP7. A key element to our positive view on UU was our stance that the dividend would not be cut going into AMP7, albeit that we assumed a flat dividend in 2020/21E, with CPIH growth thereafter. This positioned us ahead of consensus, which prior to this announcement forecast a cut to 41.39p in 2020/21. If the 2020/21 dividend is set using November 2019 CPIH of 1.5%, then the expected 2020/21 dividend will be 43.24p, suggesting that both we and consensus will need to nudge dividend forecasts upwards. We view the dividend announcement as a positive. Conference call at 14:00 A conference call will be held at 14:00 GMT, and can be accessed via +44 20 3936 2999, code: 306115.