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

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.

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.

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.

The year that transformed Britain’s LOBO landscape

12 July 2019Municipal FinanceLOBOs, Newham council, RBSNick Dunbar

Gauging the significance of the LOBO redemption wave

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

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?

Lost Lobos Part 2

19 January 2016UncategorizedKent council, LOBOs, municipal finance, Newham council, Redcar & Cleveland councilNick Dunbar

When I was in my twenties, I worked on a film being shot on location in the London borough of Newham. The film itself, which starred Jude Law and Sadie Frost, was forgettable, but one memory that stayed with me was the all-pervading smell of refined sugar from the nearby Tate & Lyle factory by the river Thames.

Newham’s cracked crystal ball

10 November 2015Municipal FinanceBarclays, interest rate risk, LOBOs, local government, municipal finance, Newham councilNick Dunbar

Between July 2007 and November 2008, Newham council entered into 10 range LOBO loans with Barclays worth a total of £238.5 million. New information on the council’s controversial loan portfolio shows the impact of its relationship with Barclays, raising questions about risk management decisions.