RWE, the German water utility buying American Water Works, is likely to issue new debt to finance the acquisition deal, according to analysts, who said RWE was also in line for a ratings downgrade.

RWE has agreed to buy the US water services company in a $7.6bn (€8.2bn) deal, including $3bn of assumed AWW debt. Morgan Stanley and Merrill Lynch are advising RWE on its takeover of the US utility.