Midlothian loan opens UK business for pbb Deutsche Pfandbriefbank
0Midlothian Council has become the first UK local authority to borrow from pbb Deutsche Pfandbriefbank.
The council has used two transactions totalling £20m in the form of forward starting loans – arrangements that are agreed in advance at a fixed interest rate for delivery on a pre-determined date in the future. The loans will repay existing debt used to finance investment in services including new schools, social housing, utilities, health and care.
————————————————————————
8th Local Authority Treasurers Investment Forum
————————————————————————-
Gary Fairley, head of finance and integrated service support at Midlothian, said the loans “provide a viable alternative to traditional Public Works Loan Board borrowing, adding certainty to the council’s loan portfolio and allowing the council to hedge against interest rate movements with loans that are extremely competitive in the current historically low investment environment.”
The loans to Midlothian means the UK becomes the fifth market for pbb in addition to operating in France, Germany, Spain and the Nordic region.
Dr Bernhard Scholz, a member if pbb’s management board, said: “The current marketplace enables local authorities to pursue more innovative and competitive financing arrangements making it attractive to specialist lenders with in-depth knowledge.”
