• Home
  • About
  • Subscribe
  • LATIF
  • Conferences
  • Dashboard
  • Edit My Profile
  • Log In
  • Logout
  • Register
  • Edit this post

Room 151

  • 151 BRIEF

    What's New?

  • Inflation ‘biggest concern for LGPS professionals’

    May 20, 2022

  • LGA calls for government support as regulators face staffing issues

    May 19, 2022

  • WMCA signs £4bn investment agreement with L&G

    May 18, 2022

  • Bill will give UK Infrastructure Bank power to lend directly to councils

    May 18, 2022

  • £400bn pension group collaborates on climate transition initiative

    May 17, 2022

  • CIPFA rejects proposal for vote on publication of fraud hub report

    May 17, 2022

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews
  • Briefs

Newham declines FOI request for LOBO replacement loan rate

0
  • by Colin Marrs
  • in 151 News · Treasury
  • — 5 Apr, 2017

A London council has refused to reveal the rate it is paying on £248.5m of fixed rate borrowing which it has converted from Lender Option Borrower Option (LOBO) loans.

Councillors at London Borough of Newham made a freedom of information request following the council’s announcement in February that it had renegotiated the terms of the LOBOs.

The council said that it has saved £94m on interest rates which would otherwise have been payable on the loans. But it has rejected a call for clarity on the new fixed rate it will pay.

In its response to the FOI request, the council said: “The information requested relates to the specific rate of interest which was negotiated in securing this new financial arrangement.


Sign up for Room151 Job Alerts


“Having consulted with the relevant financial institution we consider that in disclosing the fixed interest rate agreed, would be likely to weaken Newham’s bargaining position during future financial and contractual negotiations.

“This could potentially affect the council’s income and budget and essentially, the availability of financial resources for residents and in the delivery of Newham’s services.”

Barclays’ bargaining power on similar or related restructuring processes could also be weakened, the council said.

Newham recognised the public interest in promoting transparency, but said that maintaining the exemption outweighed the public interest in disclosure.

Councillor John Whitworth, which helped submit the FOI request, told Room151: “The executive is being secretive, as it is in all things. It is very difficult for backbench councillors to get information.”

However, he said that disgruntled councillors will continue the fight for information on the financial arrangements relating to the renegotiated LOBOs.

The FOI revealed that the councils were advised by treasury advisers Sector and Butlers on its LOBO loans portfolio.

It also said that Allen & Overy had provided legal advice while JC Rathbone & Associates and Ernst & Young had provided independent financial advice on the deal.

No fees were paid to brokers carrying out the LOBO deals, according to the council’s response.

Nick Dunbar, founder and editor of the Risky Finance website, was sceptical about the latest deal. He said: “Given that most of Newham’s Barclays LOBOs were of the highly complex ‘range LOBO’ variety with rates currently as high as 7.6%, it might have been a more fruitful strategy for the council to have disputed the entire break cost on the grounds that the products were mis-sold.

“Instead, the council has seemingly absolved Barclays of legal risk while committing to paying crippling interest rates for 50 years or more.”

Get the Room151 Newsletter

Share

You may also like...

  • Impact Awards: A week to go before deadline 22nd Apr, 2021
  • Cash dethroned: The quest for liquid yield 11th Jan, 2021
  • Property investment and structural vs cyclical change 11th Jan, 2021
  • Building back better? 27th Apr, 2021

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • Register to become a Room151 user

  • Latest tweets

    Room151 2 hours ago

    2022 LGPS valuations: difficult discussions in uncertain times: Michelle Doman looks at the impact of inflationary pressures, the war in Ukraine, climate risk and Covid-19 on employer contributions. At the start of 2022, for Local Government Pension… dlvr.it/SQlvy9 pic.twitter.com/Dd0lrHjWNb

    Room151 5 hours ago

    Investing today: nowhere to hide: Partner Content: Alex Stanley from Ardea Investment Management suggests that investors have few places to hide amid a synchronised sell-off in both bonds and equities. However, there are catalysts that[...] dlvr.it/SQlNVC pic.twitter.com/KkGGnduzPL

    Room151 1 day ago

    Treasury to restrict PWLB loans to councils at risk of non-repayment: The Treasury has released new guidance that restricts local authorities’ access to Public Works Loan Board (PWLB) advances if there is a “more than negligible risk” of a council’s… dlvr.it/SQhLTV pic.twitter.com/vBsS7xMJdb

    Room151 1 day ago

    Mixed reaction to proposed government intervention powers: There has been a mixed reaction to the government’s legislative plans to strengthen its intervention powers over local authority finances. The Levelling Up and Regeneration Bill has proposed… dlvr.it/SQhLMB pic.twitter.com/50foWxpPGs

    Room151 1 day ago

    Post-Brexit struggles for national and local government regulators. @LGAcomms @NAOorguk Click the link below to read 🔻🔻 room151.co.uk/brief/lga-call… #Brexit #government pic.twitter.com/s3c8ySGy5G

    Room151 1 day ago

    CIPFA: a question of transparency: Roman Haluszczak’s campaign for publication of the independent report into the collapse of CIPFA’s London Counter Fraud Hub has been rejected again by the institute. He is now calling for[...] dlvr.it/SQgC5V pic.twitter.com/08fWsHFF4g

    Room151 2 days ago

    Back to the future for the PWLB: The Public Works Loan Board is tightening its lending criteria to ensure that loans will be repaid by local government borrowers. But, asks Peter Findlay, shouldn’t they have been doing[...] dlvr.it/SQcmmm pic.twitter.com/bVv4fe0Xlv

    Room151 2 days ago

    Great piece from Peter Findlay on the PWLB’s tightening of its lending criteria. He raises some pointed questions for the Treasury and explains why the ‘casino council’ characterisation was simplistic and inaccurate. #PWLB #localgov room151.co.uk/treasury/back-…

    Room151 2 days ago

    The Queen's speech highlighted the need for accelerating UK infrastructure investment into levelling up projects and cutting emissions. @UKInfraBank #QueensSpeech #ClimateAction #emissions Click the link below to read 🔻🔻 room151.co.uk/brief/bill-wil… pic.twitter.com/hFmF2veVIa

    Room151 2 days ago

    Huge funding heading to the @WestMids_CA from @landg. @andy4wm #LevellingUp #netzero #regeneration Click the link below to read 🔻🔻 room151.co.uk/brief/wmca-sig… pic.twitter.com/ajhZhia6mx

    Room151 2 days ago

    LGPS governance, Cagney and Lacey style: What regulatory response can be expected following the publication of the Good Governance project’s Phase 3 report and the closure of the Single Code of Practice consultation? Susan Black offers[...] dlvr.it/SQbfXf pic.twitter.com/xwqHOEu2AP

    Room151 3 days ago

    More evidence of the importance of emerging markets in the journey to net-zero. @BordertoCoast @BrunelPP @northernlgps @EAPensionFund @WYPF_LGPS Click the link below to read 🔻🔻 #LGPS #NetZero #NetZeroCarbon #EmergingMarkets room151.co.uk/brief/400bn-pe… pic.twitter.com/qCm0EGxzLn

  • Categories

    • 151 News
    • Agent 151
    • Audit
    • Blogs
    • Business rates
    • Chris Buss
    • Cllr John Clancy
    • Council tax
    • Dan Bates
    • David Crum
    • David Green
    • Development
    • Education
    • Forum
    • Funding
    • Governance
    • Graham Liddell
    • Housing
    • Ian O'Donnell
    • Infrastructure
    • Interviews
    • Jackie Shute
    • James Bevan
    • Jobs
    • Levelling up
    • LGPS
    • Mark Finnegan
    • Net Zero
    • Private markets
    • Recent Posts
    • Regulation
    • Resources
    • Responsible investing
    • Richard Harbord
    • Risk management
    • Social care
    • Stephen Fitzgerald
    • Stephen Sheen
    • Steve Bishop
    • Technical
    • Transport
    • Treasury
    • Uncategorized
    • William Bourne
  • Archives

    • 2022
    • 2021
    • 2020
    • 2019
    • 2018
    • 2017
    • 2016
    • 2015
    • 2014
    • 2013
    • 2012
    • 2011
  • Previous story Chris Buss: A rock music guide to a career as section 151 officer
  • Next story Richard Harbord: Budget difficulties — it’s not all about social care

© Copyright 2022 Room 151. Typegrid Theme by WPBandit.

0 shares