Councils plan return to capital markets | FT Alphaville

Councils plan return to capital markets

Local councils plan to return to the capital markets en masse for the first time in decades as a result of George Osborne’s decision last autumn to raise sharply the rates on central government loans, reports the FT. They include Wandsworth council, advised by Morgan Stanley and HSBC, which is planning to issue £250m of bonds. Luke Reeve, a director at Ernst & Young, predicted that between 10 and 20 councils would raise funds in the capital markets in coming months. Meanwhile, the Local Government Association is to appoint advisers to examine setting up a collective agency – which could be a bank – to issue aggregate council bonds. Mr Osborne, chancellor, announced in last year’s comprehensive spending review an immediate rise in the rate charged on council loans from the Treasury’s Public Works Loans Board.