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Debt refinancing deal will deliver a boost of up to £15.8 million for services

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Liverpool City Council has concluded the refinancing of £65m of debt, which is projected to save £15.8 million in repayments and shave 26 years off the loan term.

The previous LOBO (Lender’s Option Borrower’s Option) arrangement had an average rate of 4.4% over 44 years.

It has now been replaced with a new funding package from the Public Works Loan Board, at an average rate of 1.73% over 18 years.

A portfolio of shorter-term loans have been taken out to cover the premium costs of terminating the previous deal.

Deputy Mayor and Cabinet member for Finance and Resources, Councillor Jane Corbett, said: “One of the things we are trying to do to mitigate the impact of having approximately £450m less council funds than we had in 2010 is to reorganise our finances so cuts to services are kept to a minimum.

“It is a bit like renegotiating your mortgage deal with a different lender to get a cheaper interest rate.

“What it means is we can use the savings to support frontline services.

“That is more important than ever at this time as we seek to protect the most vulnerable in our city.”

The council was advised on the deal by Treasury advice firm, Arlingclose.

Director David Blake, said: “Where we find banks willing to negotiate on prepayment terms local authorities can unlock significant value, removing lender’s options is a sensible way to reduce risk.”

Liverpool Waterfront