UK utilities weigh creative inflation-hedge revamps

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UK utility company Yorkshire Water is considering a radical restructuring of its inflation hedges that would separate them into interest rate and inflation components, with the latter novated to a special-purpose vehicle (SPV). The structure – known as an inflation repack – essentially reduces the funding and counterparty exposure banks face in existing trades, with much of the risk being transferred to investors via new bonds linked to the UK's Retail Prices Index (RPI). It is thought to have

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