Crunch time for LOBO derivatives

13 November 2023Municipal Finance, Risk CommentaryBarclays, interest rate swaps, interest rates, LOBOs, options, RBSNick Dunbar

UK interest rates have risen so much, that obscure options buried in local authority loan contracts are about to be triggered for the first time

Continue reading..

Barclays and the question of reliance

25 February 2022Municipal FinanceBarclays, litigation, LOBOs, Newham councilNick Dunbar

An eve-of-trial settlement between Newham Council and Barclays brings a decade-long saga to an end but leaves open a key question in UK law.

Continue reading..

Which councils will go bust next?

25 February 2021Municipal Financeliquidity, LOBOs, local governmentNick Dunbar

UK councils are at the front line of the pandemic, but financial mismanagement is adding to their woes. Risky Finance has compiled a list of English authorities mostly likely to be on the receiving end of a government bailout.

Continue reading..

Argentina’s local debt puzzle

28 January 2020Economics, Municipal FinanceArgentina, Emerging markets, sub-sovereignsNick Dunbar

Sub-sovereign or regional debt is normally viewed as riskier than the sovereign. But default-prone Argentina has pushed this thesis to breaking point.

Continue reading..

Labour’s local debt penalty

12 November 2019Municipal Financeinvestments, LOBOs, local governmentNick Dunbar

The UK’s political divisions are mirrored in the debt exposures of local authorities. Central government action may be increasing the divide.

Continue reading..

The year that transformed Britain’s LOBO landscape

12 July 2019Municipal FinanceLOBOs, Newham council, RBSNick Dunbar

Gauging the significance of the LOBO redemption wave

Continue reading..

Should councils pay interest penalties on government loans?

26 April 2018Municipal FinanceNick Dunbar

Market-based loan repayment penalties imposed by the UK government are being blamed for worsening pressures faced by local councils, and incentivising property speculation. Now calls are being made to reform the system.

Continue reading..

Council property speculation, housing reforms and Grenfell Tower

17 July 2017Articles, Municipal FinanceNick Dunbar

UK government housing finance reforms helped spark a property speculation boom by councils, and may have contributed to the Grenfell tragedy.

Continue reading..

UK local authority debt in six charts

20 March 2017Municipal Financeinterest rates, LOBOs, local governmentNick Dunbar

Dozens of UK councils are paying a significant proportion of tax revenues in debt interest payments, and the burden is worsened by record low interest rates

Continue reading..

Barclays LOBO waiver forestalls council legal threat

16 March 2017Municipal FinanceAccounting, Barclays, interest rate risk, LOBOsNick Dunbar

Why did the bank unilaterally waive LOBO provisions in loans last year, losing as much as £1 billion in the process?

Continue reading..