William Eichler 02 November 2018

Kent CC pays back LOBO loan early

Kent CC pays back LOBO loan early image

Kent County Council has reached an agreement with Royal Bank of Scotland to pay back its LOBO loan debt early.

The council borrowed £60m from the bank between 2008 and 2011, with a 4% interest rate over the next 50 years.

These loans have now been paid back using a shorter-term Government loan at 2.5%, with a £13.4m premium paid to end the contract early.

Due to changes in accounting requirements, some banks are looking to reduce their Lender Option Borrower Option (LOBO) portfolios.

Kent CC explained that they were concerned RBS might sell their debt to a third party that might not exercise the ‘Lender Option.’ This would tie the council into a very long debt. 

‘If we were able to prepay, it would enable us to manage our debt more flexibly and reduce long-term financing risk,’ a council statement said before the final decision to pay back the loan was taken.

‘If the prepayment terms are sufficiently favourable we would explore options to refinance the debt at a lower interest cost which would result in a net revenue saving.’

‘We are only likely to proceed if the saving from the difference between current financing and alternative refinancing is greater than this premium, creating a net saving on the council’s budget,’ the statement added.

Overcoming the barriers to Commercial Card use image

Overcoming the barriers to Commercial Card use

Want to reap the benefits of Commercial Cards but coming up against some challenges? James Sykes, Head of Commercial Cards, Lloyds Bank and David Legg, Head of Corporate Card Products, Lloyds Bank, discuss how the payments industry is helping organisations unlock their true value.
SIGN UP
For your free daily news bulletin
Highways jobs

Commercial Customer Manager

North Yorkshire County Council
£39,880 to £43,857
Are you someone who is innovative and has the drive to increase revenue for the Council whilst ensuring excellent service provision to our customers? Northallerton, North Yorkshire
Recuriter: North Yorkshire County Council

Social Care Lead Officer

Sandwell Metropolitan Borough Council
£35,745 - £40,876 pro rata per annum
A vacancy has become available for a part time Social Care Lead Officer, to cover in... Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council

Communications & Corporate Affairs Manager

Sandwell Metropolitan Borough Council
£47,845 - £50,900 per annum
To apply for this role please upload your most recent CV that sets out your relevant experience against the job description. Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council

Career Grade Planning Officer

Royal Borough of Greenwich
£27978 - £37722 per annum + n/a
Career Grade Planning Officer - West Area and East Area Team The Royal Borough of Greenwich continues to faces an unprecedented growth agenda in terms England, London
Recuriter: Royal Borough of Greenwich

Highway Engineer - Reactive Maintenance

Bracknell Forest Borough Council
£35,354 - £40,506 incl. LWA, plus £963 car allowance
We make a difference to the environment we live in. Come and help us manage our highway infrastructure. Bracknell, Berkshire
Recuriter: Bracknell Forest Borough Council

Public Property

Latest issue - Public Property News

This issue of Public Property examines how how flexible workspaces can lead the way in regeneration for local authorities, Why local authority intervention is key to successful urban regeneration schemes and if the Government’s challenge of embracing beauty is an opportunity for communities.

The March issue also takes a closer look at Blackburn with Darwen Council's first digital health hub to help people gain control over health and care services.

Register for your free digital issue