Lancashire to issue >£250m bond
0Lancashire County Council has agreed plans to launch its own bond aimed at raising more than £250m.
The council’s cabinet is understood to have last week approved the launch of the bond, aimed at funding the council’s borrowing requirement to fund services over coming years.
Speaking to Room151 Quarterly Magazine*, county treasurer Gill Kilpatrick said that the move could help the council protect itself against future interest rate rises.
She said: “The council has a policy that we have a significant proportion of our debt covered by a rolling short-term debt programme, because we’ve been able to significantly reduce our refinancing costs, although we budget for rates going up.”
She said that the council would be looking at an issuance of somewhere over £250m and added: “We may do it in a series of tranches and we may do it in a series of different lengths. We may do a proportion of it for five years, another proportion for 20, another proportion for 40. That detail is still being worked through.”
Preparatory work carried out for the council shows that the bond would allow the council to borrow at a lower rate than from the Public Works Loan Board.
Kilpatrick said that the council faces taking £300m out of its cost base up to 2018 based on current projections.
In February, while setting the 2014/15 budget, the council agreed a package of measures to deliver savings of £139m towards this funding gap.
However, last week’s cabinet meeting heard that spending pressures continue to build, particularly in the area of social care, while economic growth had been stronger in some parts of the county than others.
Kilpatrick added that the council would also be looking to take advantage of borrowing from the LGA’s proposed municipal bonds agency if it gets off the ground.
*The full interview with Lancashire’s s151, Gill Kilpatrick, will be published in the coming edition of Room151 Quarterly.
