Capital markets have long been unattractive funding routes for UK local authorities as the Public Works Loan Board — a government body that provides loans to public bodies — has offered lending levels that public and private markets could not compete with. But a recent Treasury announcement may have tipped the scales in PP players' favour.
The PWLB has announced it has increased its lending margins to UK councils by 100bp, prompting stakeholders in private placement markets to spy an opportunity for growth.
In a statement about the PWLB interest rates, the UK Treasury said:
“PWLB lending is offered at a fixed margin