01 September 2016

Barclays first bank to scrap LOBO loans

Barclays has become the first bank to scrap high interest Lender Option, Borrower Option (LOBO) loans for councils.

The move will see more than 100 LOBO loans - thought to be worth around £8bn - converted into fixed-rate loans.

A spokesperson for Barclays said: ‘Under the changes Barclays is permanently waiving its 'lender option' to amend the interest rate at given periods. This will create certainty for the client for the duration of the loan, by locking in the fixed rate for its lifetime.’

Overall, around 240 local authorities have taken up to £15bn in LOBO loans from private banks, which charge interest rates of more than 7% in some cases.

To date, residents from 24 different local authorities have mounted legal objections to their use, claiming the loans are ‘irrational’ expenditure and therefore unlawful.

The spokesperson added: ‘Over a hundred local authorities and housing associations will benefit from greater certainty that their borrowing costs will not rise in future. They will also enjoy reduced break costs than there would have been had Barclays retained its right to change the interest rate. The original value they secured when taking out the loan at rates lower than those available publicly at the time, is now locked in for the lifetime of the loan.’

What’s happening inside the LGPS? image

What’s happening inside the LGPS?

Get the most informed take on the challenges and opportunities that substantial reform will bring at this year’s PLSA Local Authority Conference.
SIGN UP
For your free daily news bulletin
Highways jobs

Registered Building Inspector (Band 2/Grade 7)

Health and Safety Executive
£60,760 - £65,776
The Building Safety Regulator (BSR) is transforming building safety regulation across England. United Kingdom / various Locations
Recuriter: Health and Safety Executive

Revenues and Recovery Team Leader

Ashfield District Council
£37,938 - £40,476 per annum (pay award pending)
We have an exciting opportunity for a Revenues and Recovery Team Leader Sutton-In-Ashfield, Nottinghamshire
Recuriter: Ashfield District Council

Housing Options Officer

Ashfield District Council
£31,067 - £33,366 per annum (pay award pending)
Do you want to make a real difference to the lives of residents in housing need? Sutton-In-Ashfield, Nottinghamshire
Recuriter: Ashfield District Council

Building Services Operative

Ashfield District Council
£25,584 - £27,269 per annum (pay award pending)
The Facilities team are looking to recruit an enthusiastic individual Sutton-In-Ashfield, Nottinghamshire
Recuriter: Ashfield District Council

Street Cleansing Technician (CDC)

City Of Doncaster Council
Grade 5, £24,397 per annum (pay award pending)
Do you enjoy working outside, as part of a team that make a direct difference to the communities of Doncaster? Doncaster, South Yorkshire
Recuriter: City Of Doncaster Council
Linkedin Banner