Glasgow City Council has announced it will be using a multi-million pound investment in its property company to help fund its equal pay settlement.
The specialist insurer of pension funds, Pension Insurance Corporation plc (PIC), has said it will invest £195m of debt finance in City Property Glasgow Ltd, a subsidiary of the Glasgow City Council Group.
The debt, which will be secured on a portfolio of five strategic city properties, including the Royal Concert Hall, the Riverside Museum and various sports and leisure facilities, will be used to fund the council’s equal pay settlement.
Glasgow City Council agreed to pay out a reported £548m in January after a long-running dispute over women being paid historically less than men in jobs of the same grade.
Pauline Barclay, managing director of City Property, said: ‘We are pleased to have been able to complete this transaction with PIC, an increasingly important lender in the private debt space. The PIC team have been flexible and proactive in helping us achieve our aims.’
According to PIC, the investment was attractive because the 29-year amortising debt profile was a good match for their future pension payments.
Allen Twyning, head of debt origination at PIC, said: ‘We are pleased to have completed this transaction which supports Glasgow City Council. It represents a good portfolio diversifier for PIC.
‘With almost seven billion of insured pension scheme liabilities announced so far this year, PIC continues to look for secure, long-term cashflows to back our pension payments.
‘These investments are a good fit for our long-term liabilities and at the same time have a wider benefit for society.’
