UUGRY United Utilities Group PLC (PK)

By Elena Vardon

United Utilities Group has agreed to a 1.8 billion-pound ($2.3 billion) pension-risk transfer deal with Legal & General Group, both companies said in emailed statements on Tuesday.

Under the agreement, trustees for the FTSE 100 water group's pension program will take out an insurance policy with Legal & General, which will then invest the premium to pay United Utilities pension program members' benefits.

"The pension scheme trustees have taken the next step in their derisking strategy and are insuring around two thirds of the pension liabilities with Legal and General to ensure even greater long term security of the schemes," a United Utilities spokesperson said.

The spokesperson added that the move enhances its financial resilience with a gearing level at 58%, and leaves it with enough liquidity to cover cash flow to at least 2026.

"We are pleased to have been able to work with the trustees to complete this transaction, helping to provide further long-term security to the schemes' members," Chief Executive of Legal & General Retirement Institutional Andrew Kail said, adding that the group has written GBP6.7 billion of pension risk transfer business in the U.K. since the start of the year.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

July 11, 2023 08:57 ET (12:57 GMT)

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