2020/21 Update on LOBO loans

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Research for Action

Dear Torfaen Council,

We would like to ask for an update on your current and historic LOBO loan portfolio.

We are aware that in 2015 you held a certain number of LOBO loans and that some of these may now have been cancelled or transformed into fixed-rate loans. The information requested below is for all the LOBO loans you originally held in 2015 and any changes to them since.

Please provide:

A. A spreadsheet in .xls format, with one line for each loan and the related information under each of the following column headings:
1. Reference number
2. Principal
3. Initial counterparty
4. Most recent counterparty
5. Date when the loan was transferred to the most recent counterparty.*
6. Has the option been exercised?
7. If yes, date when the option was exercised.
8. Most recent interest rate
9. Fairvalue of the loan at the end of the 2015/16 financial year
10. Fairvalue of the loan at the end of the 2016/17 financial year
11. Fairvalue of the loan at the end of the 2017/18 financial year
12. Fairvalue of the loan at the end of the 2018/19 financial year
13. Fairvalue of the loan at the end of the 2019/20 financial year
14. Fairvalue of the loan at the end of the 2020/21 financial year
15. The name of the Treasury Management Advisor at the time the loan was taken out
16. The name of the broker who arranged the loan
17. The fee paid to the broker to arrange the loan
18. Please indicated if the loan has been cancelled, refinanced, restructured, including cases when the options were removed and the loan was transformed into a fixed-rate loan.

*Note: If there have been other counterparties during the term of the loan, please indicate in the notes the name of the other counterparties and the date when the loan was transferred to them.

B. For all the loans that have been cancelled, refinanced or restructured, including cases when the options were removed, please provide the following additional information:
19. The date on which the loan was cancelled, refinanced, restructured or the option was removed
20. The breakage cost for the cancelling, refinancing or restructuring the loan
21. New interest rate in the case of a restructuring
22. New maturity date in the case of a restructuring
23. Fairvalue of the new loan at the end of 2016/17
24. Fairvalue of the new loan at the end of 2017/18
25. Fairvalue of the new loan at the end of 2018/19
26. Fairvalue of the new loan at the end of 2019/20
27. Fairvalue of the new loan at the end of 2020/21
28. Name of the advisor for the cancelling, refinancing or restructuring of the loan
29. Fee paid to the advisor for arranging the cancelling, refinancing or restructuring of the loan

C. A second spreadsheet in .xls format, with one line for each loan showing the following information:
- 1st column: internal reference number
- 2nd column: Principal
- 3rd column: initial interest rate
- 4th column: most recent interest rate
- 5th column: Original projection of the total interest to be paid over the whole term of the loan (as from the drawdown date to the original maturity date, independently if the loan has now been cancelled or restructured)
- Followed by one column for each financial year, from when the loan was taken out to 2020/21 indicating for each loan the total interest payment made in that year.**

**Note: Please provide the exact payments and not approximate calculations, as payments will vary depending on the calculation method (for example if it is a leap year or not).

D. A copy of all the original loans

Kind regards,

Ludovica Rogers on behalf of Research for Action

TCBC - FOI, Torfaen County Borough Council

Dear Ludovica Rogers,

 

21/185: FREEDOM OF INFORMATION REQUEST

 

Thank you for your email dated 15/06/2021 requesting information under the
Freedom of Information Act 2000.  I have logged your email and will deal
with your request in order that we can respond to you within the statutory
deadline of 20 working days.

 

I will contact you further as soon as the relevant information is
available.

 

Yours sincerely

 

 

Chris Corten

ASSISTANT COMPLAINTS/FOI MANAGER / RHEOLWR CYNORTHWYOL CWYNION/RHYDDID
GWYBODAETH

Resources Directorate/Cyfarwyddiaeth Adnoddau

Torfaen County Borough Council / Cyngor Bwrdeistref Sirol Torfaen

Phone/Ffôn: 01495 742170

Email/Ebost: [1][email address]

 

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TCBC - FOI, Torfaen County Borough Council

1 Attachment

Dear Ludovica Rogers,

 

21/185: FREEDOM OF INFORMATION REQUEST

 

Thank you for your email dated 15/06/2021 requesting information under the
Freedom of Information Act 2000. I am now in a position to respond to your
questions as follows:

 

The information requested below is for all the LOBO loans you originally
held in 2015 and any changes to them since.

 

Please provide:

 

A. A spreadsheet in .xls format, with one line for each loan and the
related information under each of the following column headings:

1. Reference number

2. Principal

3. Initial counterparty

4. Most recent counterparty

5. Date when the loan was transferred to the most recent counterparty.* 6.
Has the option been exercised?

7. If yes, date when the option was exercised.

8. Most recent interest rate

9. Fairvalue of the loan at the end of the 2015/16 financial year

10. Fairvalue of the loan at the end of the 2016/17 financial year

11. Fairvalue of the loan at the end of the 2017/18 financial year

12. Fairvalue of the loan at the end of the 2018/19 financial year

13. Fairvalue of the loan at the end of the 2019/20 financial year

14. Fairvalue of the loan at the end of the 2020/21 financial year

15. The name of the Treasury Management Advisor at the time the loan was
taken out None

16. The name of the broker who arranged the loan N/A

17. The fee paid to the broker to arrange the loan N/A

18. Please indicated if the loan has been cancelled, refinanced,
restructured, including cases when the options were removed and the loan
was transformed into a fixed-rate loan. Barclays – see attached

 

*Note: If there have been other counterparties during the term of the
loan, please indicate in the notes the name of the other counterparties
and the date when the loan was transferred to them.

 

B. For all the loans that have been cancelled, refinanced or restructured,
including cases when the options were removed, please provide the
following additional information:

19. The date on which the loan was cancelled, refinanced, restructured or
the option was removed

20. The breakage cost for the cancelling, refinancing or restructuring the
loan

21. New interest rate in the case of a restructuring

22. New maturity date in the case of a restructuring

23. Fairvalue of the new loan at the end of 2016/17

24. Fairvalue of the new loan at the end of 2017/18

25. Fairvalue of the new loan at the end of 2018/19

26. Fairvalue of the new loan at the end of 2019/20

27. Fairvalue of the new loan at the end of 2020/21

28. Name of the advisor for the cancelling, refinancing or restructuring
of the loan

29. Fee paid to the advisor for arranging the cancelling, refinancing or
restructuring of the loan

 

C. A second spreadsheet in .xls format, with one line for each loan
showing the following information:

- 1st column: internal reference number

- 2nd column: Principal

- 3rd column: initial interest rate

- 4th column: most recent interest rate

- 5th column: Original projection of the total interest to be paid over
the whole term of the loan (as from the drawdown date to the original
maturity date, independently if the loan has now been cancelled or
restructured)

- Followed by one column for each financial year, from when the loan was
taken out to 2020/21 indicating for each loan the total interest payment
made in that year.**

 

**Note: Please provide the exact payments and not approximate
calculations, as payments will vary depending on the calculation method
(for example if it is a leap year or not).

 

Please see the attached document for information in response to the above.

 

D. A copy of all the original loans

 

The copies of the LOBO agreements are being withheld under S43(2) –
prejudice to commercial interests. This exemption applies when information
will be exempt if its disclosure would, or would be likely to, prejudice
the commercial interest of any person. The exempt information includes the
suppliers commercially sensitive data, releasing this information could
affect their ability to price for and win new business opportunities and
to perform them in a profitable manner within a commercially competitive
market.

 

The disclosure of this information would provide the supplier’s
competitors with sensitive commercial details. They could better cost and
price their activities, in order to set pricing so as to win business in
place of the supplier. Disclosure of this information would therefore
affect the supplier’s ability to participate competitively in commercial
activity, be effective in negotiations and successfully enter into
transactions with other commercial entities or local authorities.

 

The exempt information would also highlight the Authority’s current
commercial arrangements, similarly making it more difficult for the
Authority to obtain best value for its public funds in future in this
market. This would be likely to prejudice the commercial interests of the
Authority and its ability to make the most of its publicly funded budget
when engaging with third party suppliers in this area.

 

The suppliers have advised that the loan contracts are confidential to the
authority and themselves and are of the view that releasing details of the
loan contracts to a third party will damage their legitimate commercial
interests.

 

The authority considers that the exemption contained within section 43(2)
of the FOIA is engaged subject to the public interest test, which means
that the Local Authority has to undertake a balancing exercise and
consider the factors for and against disclosure which we have considered
below;

 

The factors in favour of disclosure would be transparency and
accountability of public funds and that public money is being used
effectively

 

The factors against disclosure are that the information provided to the
authority is the suppliers confidential information which has been
provided in confidence. Releasing this information could be damaging to
both the suppliers and the reputation of the authority. Disclosure could
lead to more public money having to be spent on similar arrangements in
the future because financial details of what may be acceptable for these
types of services have been made available in advance. It would also
therefore be harmful to the fee strategy, negotiating stance and other
resources of both the Authority and the supplier to provide such
confidential and commercially prejudicial details into the public domain
under the FOIA at present.

 

We do not have the authority from the lending organisations to release
this information and having considered those the factors above, the Local
Authority is of the view that the information should be withheld.

 

Information supplied in response to any Freedom of Information Act request
may be subject to copyright. A single copy of information supplied under
the Freedom of Information Act may only be used for personal,
non-commercial research or study, unless stated otherwise. It must not be
passed to others, copied or re-published in whole or in part without
permission from the copyright holder. Any copyright statement that forms
part of or in any way refers to the information provided must not be
altered or removed.

 

If you have any queries about this letter or are unhappy about the service
you have received in relation to your request and wish to make a complaint
or request a review, please do not hesitate to contact me in writing. A
request for an internal review should be made within 40 working days of
the date of the response.

 

If you are not content with the outcome of your complaint, you may apply
directly to the Information Commissioner for a decision. Generally, the
Information Commissioner’s Office (Wales) cannot make a decision unless
you have exhausted the complaints procedure provided by this Council. The
Information Commissioner can be contacted at: The Information
Commissioner’s Office (Wales), 2^nd Floor, Churchill House, Churchill Way,
Cardiff, CF10 2HH. Telephone 0330 414 6421 or e-mail [1][email address].

 

Yours sincerely

 

 

Chris Corten

ASSISTANT COMPLAINTS/FOI MANAGER / RHEOLWR CYNORTHWYOL CWYNION/RHYDDID
GWYBODAETH

Resources Directorate/Cyfarwyddiaeth Adnoddau

Torfaen County Borough Council / Cyngor Bwrdeistref Sirol Torfaen

Phone/Ffôn: 01495 742170

Email/Ebost: [2][email address]

 

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Research for Action

Dear FOI officer,
Thank you for the information provided.
However, could you kindly provide the breakdown of the fairvalues per each loan (as requested), rather than the totals.
Kind regards,
Ludovica Rogers

TCBC - FOI, Torfaen County Borough Council

1 Attachment

Dear Ludovica Rogers,

 

Thank you for your email below. Please find the breakdown required on the
attached spreadsheet. Please do not hesitate to contact if there are any
further queries,

 

Regards,

 

Chris Corten

ASSISTANT COMPLAINTS/FOI MANAGER / RHEOLWR CYNORTHWYOL CWYNION/RHYDDID
GWYBODAETH

Resources Directorate/Cyfarwyddiaeth Adnoddau

Torfaen County Borough Council / Cyngor Bwrdeistref Sirol Torfaen

Phone/Ffôn: 01495 742170

Email/Ebost: [1][email address]

 

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Research for Action

Dear FOI officer,
Thank you for your response.
Kind regards,
Ludovica Rogers