04.07.11
GLA’s £600m bond issue to raise Crossrail funds
The Greater London Authority is turning to the capital markets to raise money for Crossrail.
According to the Financial Times, it is the first local authority to do so for 17 years, having announced a £600m bond issue, through a new vehicle developed with Lloyds Bank Corporate Markets.
It reported that the last councils to use the bond market were Leicester and Salford in 1994.
Mayor of London Boris Johnson said: “This is a great example of the public and private sectors coming together and delivering an innovative solution to bear down on borrowing costs. I hope this is a model local government can develop for other important improvements we make to the capital and beyond.”
The GLA believes the bond option could shave £65m off the costs of long-term borrowing for the scheme. It is required to borrow a total of £3.5bn for Crossrail, just under a quarter of the total £14.8bn construction bill.
Andrew Géczy, chief executive of wholesale markets and co-head of Lloyds Bank Corporate Markets, called the transaction “significant as well as innovative”.
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