Cash-strapped local councils to raise billions with new municipal bonds

Local authorities are on the verge of creating a multibillion pound municipal bond market, with the first issue by a municipal debt agency expected in April. It is set to raise £250-£300m, with sources close to the project expecting annual issuance to ramp up quickly to £2bn-£3bn. The bonds will be backed jointly by 48 local councils and the Local Government Association and issued by a specially created entity, the Local Capital Finance Company. Councils are said to have grown frustrated at charges imposed on them by the Treasury's Debt Management Office, on which they have so far relied on for most of their £84bn of outstanding funding. The LGA believes bonds issued via the pooled LCF vehicle could end up cutting the price they pay for finance by 0.25% or more - saving upwards of £5m a year. It could also improve access to European funds through the European Investment Bank.


Note: News bulletin content has been provided by a third-party and is not the opinion of Santander.

Other Articles

When you’re an established business, recruiting top talent in all the areas you need can seem like a never-ending challenge.


If you’re a start-up or small business, how can you put together an attractive employee package to appeal to top talent – graduate and…


Mexico is predicted to become one of the world’s top 10 economies in the next 10 or 20 years.

Stop fraud

More than one million incidents of financial fraud occurred in the first six months of 2016, according to official figures released by…

Santander’s Head of SME International Mark Collings discusses why exporting to new global markets may provide businesses with new and…

Where Next?