UK local authorities: prepare for a shock

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By Silas Brown
24 Oct 2019

A UK government body providing cheap debt to local authorities increases its lending margins, so in step nimble institutional investors to capture a slice of a new asset class. It sounds poetically simple. The reality will be more prosaic.

The body in question, the Public Works Loan Board (PWLB), has for several years provided local authorities cheap borrowing to the tune of 80bp over Gilts — a level that no self-respecting private investor could stoop to.

This has effectively deterred UK local authorities from courting capital markets ...

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