Why Does Lancashire County Council own 3 London Borough of Merton LOBO Loans?

Joel M Benjamin made this Rhyddid Gwybodaeth request to Lancashire County Council

This request has been closed to new correspondence from the public body. Contact us if you think it ought be re-opened.

Roedd y cais yn rhannol lwyddiannus.

Dear Lancashire County Council,

Recently the London Borough of Merton released information regarding counter-parties to its 15 current LOBO loans.

https://www.whatdotheyknow.com/request/3...

Three of the loan counter-parties, (refer to loan reference numbers 3001000153, 3095000112 and 3098000138) are listed as Lancashire County Council?

Questions:

1) Why is Lancashire County Council purchasing LOBO Loans with other councils on the secondary market?

2) Whose decision was it to purchase the 3 LOBO loans taken out by LB Merton?

3) On what dates were each of the LOBO loans purchased?

4) How much did Lancashire CC pay the previous holder for each of the LOBO loans?

5) How much annual interest income does Lancashire CC derive from each of these loans?

6) Under what market or other stress conditions would Lancashire CC exercise its "lenders option" of increasing the interest rate payable by Merton on each loan, and how would Lancashire CC consider the potential impacts on Merton Council of doing so?

7) Where are the three Merton LOBO loans listed in Lancashire's annual accounts?, and are the LOBOs held on behalf of the council, or the LGPS pension fund scheme?

Yours faithfully,

Joel M Benjamin

Freedom of Information, Lancashire County Council

Dear Mr Benjamin ,

 

Request for information under the Freedom of Information Act 2000

 

I am writing to acknowledge receipt of your request 23/04/16, in which you
request the disclosure of information under the provisions of the above
Act.

 

I can confirm that your enquiry will now be assigned to an officer who
will commence a search for the information you require and they will
respond in due course. The deadline date for issuing you with full
response is 23/04/16. We will endeavour to provide a response well in
advance of this date, however, should we envisage any delays, or require
more details from you, we will contact you immediately.

 

If you have any queries about the above, please do not hesitate to contact
us, quoting ref. 909.575

 

Yours sincerely,

 

Information Governance Team

Lancashire County Council

[1]www.lancashire.gov.uk

 

Worried about changes in someone’s memory or behaviour? Visit
[2]lancashire.gov.uk/dementia for information, advice and support.

dangos adrannau a ddyfynnir

Freedom of Information, Lancashire County Council

1 Atodiad

Dear Mr Benjamin,

 

Request for information under the Freedom of Information Act 2000

 

Further to your email dated 23^rd April, in which you request the
disclosure of information under the provisions of the above Act, we are
now in a position to respond.

 

1)    Why is Lancashire County Council purchasing LOBO Loans with other
councils on the secondary market?    

Attractively value asset available in the secondary market issued by an
acceptable credit counterparty at a time when credit risk was key. Assets
consistent with Lancashire County Council's medium term portfolio strategy
both in terms of yield stability and credit quality .

2) Whose decision was it to purchase the 3 LOBO loans taken out by LB
Merton?  

The decision was made by the Chief Investment Officer.

3) On what dates were each of the LOBO loans purchased?

13 ^ December 2010 (2 loans) 20 ^ December 2010 (1 loan)

4) How much did Lancashire CC pay the previous holder for each of the LOBO
loans?

The price paid to the broker in the secondary market for each was
(114.43/141.11/123.60)

5) How much annual interest income does Lancashire CC derive from each of
these loans?

Actual interest received is (£239,600/£167,858.63/£140,000), we use EIR
method.

6) Under what market or other stress conditions would Lancashire CC
exercise its " lenders option" of increasing the interest rate payable by
Merton on each loan, and how would Lancashire CC consider the potential
impacts on Merton Council of doing so?

An assessment of the, Gamma, Vega and Theta value of the underlying
options package.  Given the current terms on the loans there is virtually
no circumstances that would require option exercise.

7) Where are the three Merton LOBO loans listed in Lancashire's annual
accounts?, and are the LOBOs held on behalf of the council, or the LGPS
pension fund scheme?

Page 89 of the Statement of Account 2014/15 (attached), Long-term
Investments - Available for sale financial assets. They are Local
Authority Bonds with LOBO terms therefore are not referred to as LOBO's in
the accounts. They are held by Lancashire County Council.

 

In the event that you wish to complain about the manner in which your
enquiry has been handled, you should write in the first instance to The
Freedom of Information Officer, Lancashire County Council, PO Box 78,
County Hall, Preston PR1 8XJ, or email
[1][Lancashire County Council request email] and the matter will be referred
to an Information Governance Manager for review and reconsideration.

 

If, after this stage, you remain dissatisfied, you have the right to refer
the matter to the Information Commissioner, whose contact details are as
follows:

 

The Information Commissioner

Wycliffe House

Water Lane

Wilmslow

Cheshire

SK9 5AF

 

Tel:                   01625 545700

Email:               [2][email address]

Website:           [3]http://www.ico.org.uk

 

Your request will now be closed as of this date.

 

Yours sincerely

 

 

Mr A Martin

Access to Information Officer

Information Governance Team

Lancashire County Council

PO Box 78

County Hall

Preston

PR1 8XJ

 

Email:     [4][Lancashire County Council request email]

 

 

20 children in Lancashire come into care each week. Could now be the
[5]time to foster for your local authority?

dangos adrannau a ddyfynnir