Door Opens for UK Councils Seeking Cheaper Debt

The agency set up five years ago to help councils increase their sources of funding by raising cheaper debt is set for its first issuance, paving the way for what cash-strapped local authorities hope will become a thriving municipal bond market in the UK, the Financial Times reported. The move by the UK Municipal Bonds Agency comes three months after the government sharply raised the interest rate on its own local authority loans — via the Public Works Loan Board (PWLB) — inspiring councils to look elsewhere for new funding streams. The MBA confirmed on Thursday that it would issue its first bond with Lancashire county council, which is understood to be looking to raise £250m to £300m within weeks. The MBA told the Financial Times the issuance was subject to the council’s “usual governance processes”. Read more