Cancellation/ re-negotiation of £40m RBS Inverse Floater LOBO Loans

The request was partially successful.

Dear City of Edinburgh Council,

Please provide information regarding Edinburgh City Council's renegotiation/ cancellation of its £40m inverse floater LOBO loan portfolio.

Including the following information:
1. Details of the councils negotiating strategy & correspondence with RBS
2. Any comparison with, or benchmarking of, similar RBS LOBO renegotiation/ cancellation deals undertaken by English councils with inverse LOBOs
3. The details of any firm(s) providing external advice on the RBS LOBO cancellation, the basis of this advice, and the associated cost to council taxpayers
4. The position/ title and name of council staff directly involved in the negotiations with RBS and decision to cancel the loans
5. The calculated savings and formula for determining applicable savings used by the council to ensure public value for money in this deal
6. The premium or breakage penalty paid by Edinburgh City Council to exit the £40m RBS LOBOs, and the amortised cost of this break penalty across the life of the new PWLB loan facility
7. The interest rate given to Edinburgh by the PWLB to refinance the £40m, also confirming whether this is a fixed or variable/ floating rate loan.
8. Finally, please explain why it took Edinburgh Council an extra 12months to cancel these RBS LOBO loans than English Councils?, and provide the interest premium paid to RBS over this period of inaction?

Yours faithfully,

Joel M Benjamin

City of Edinburgh Council

Mr Joel Benjamin

Our ref: 25423

Dear Mr Benjamin

Acknowledgement of Request

Subject: Cancellation/ re-negotiation of £40m RBS Inverse Floater LOBO Loans

Thank you for your request for information of 07/10/2019 which was received on 07/10/2019. In your request you asked for the following;

1. Details of the councils negotiating strategy & correspondence with RBS
2. Any comparison with, or benchmarking of, similar RBS LOBO renegotiation/ cancellation deals undertaken by English councils with inverse LOBOs
3. The details of any firm(s) providing external advice on the RBS LOBO cancellation, the basis of this advice, and the associated cost to council taxpayers
4. The position/ title and name of council staff directly involved in the negotiations with RBS and decision to cancel the loans
5. The calculated savings and formula for determining applicable savings used by the council to ensure public value for money in this deal
6. The premium or breakage penalty paid by Edinburgh City Council to exit the £40m RBS LOBOs, and the amortised cost of this break penalty across the life of the new PWLB loan facility
7. The interest rate given to Edinburgh by the PWLB to refinance the £40m, also confirming whether this is a fixed or variable/ floating rate loan.
8. Finally, please explain why it took Edinburgh Council an extra 12months to cancel these RBS LOBO loans than English Councils?, and provide the interest premium paid to RBS over this period of inaction?

I can confirm that your request will be processed under the Freedom of Information (Scotland) Act 2002, Environmental Information Regulations (Scotland) 2004, or the INSPIRE (Scotland) Regulations 2009.

You will receive the information requested within 20 working days unless the Council does not hold the information, or there is a reason for it to be withheld. We will write to you in any event. This means we have until 04/11/2019 to respond to your request.

In some circumstances a fee may be payable and if that is the case we will let you know.

If you have any requirements regarding the format any information should be supplied in, e.g. the language to be used, audio, large print and so on, then please let me know.

If you have any queries or concerns, do not hesitate to get in touch. Please quote the reference number above in any future communications.

To promote transparency and accountability, please note it is the Council’s policy to publish all request details and responses made under the freedom of information legislation. This information will be made available through the Council’s website and will not include your personal details. The disclosure log is available at the following link: http://www.edinburgh.gov.uk/homepage/175....

Further information about your rights and accessing information is available on our website at: www.edinburgh.gov.uk

Yours sincerely,

Information Governance Unit
Level 2:1, Waverley Court, Edinburgh EH8 8BG Tel 0131 200 2340
[Edinburgh City Council request email] www.edinburgh.gov.uk

Information Rights Officer 2, City of Edinburgh Council

Link: [1]File-List

Mr Joel Benjamin

 

[2][FOI #609451 email]

 

Our ref: 25423

 

Dear Mr Benjamin

 

Freedom of Information (Scotland) Act 2002 - Release of Information

 

Subject: Cancellation/ re-negotiation of £40m RBS Inverse Floater LOBO
Loans

 

Thank you for your request for information of 07/10/2019 which has been
processed and considered under the Freedom of Information (Scotland) Act
2002. Unfortunately, we are only able to respond to part of your request
and the information is provided below.

 

We are unable to disclose any information in response to questions 1, 2,
5, 6 and part of 8. I consider that to do so would result in the Council
potentially being in breach of its contractual obligations of
confidentiality.  The Council also considers that disclosure would, at
this time, be detrimental to its commercial interests. The relevant
exemptions under the Freedom of Information Act (Scotland) 2002 are
33(1)(b) and 36(2)(b) respectively. 

 

Section 33(1)(b) states that information is exempt if its disclosure under
this Act would, or would be likely to, prejudice substantially the
commercial interests of any person. When information is released under
freedom of information legislation, it is, in effect released to the
world.  The information is published on the Council’s website and is
available to anyone who would wish to see it, not simply the applicant. 
When considering whether information is suitable for disclosure under this
legislation, the Council must consider the potential impact of such a
disclosure and whether there are any consequences which would not be in
the public interest.

 

In this case, it has been determined that releasing the information you
have asked for, at this time, would be likely to damage the commercial
interests of the City of Edinburgh Council and would also be likely to
cause detriment to the commercial interests of the third party, which
could, in turn, expose the Council to legal claims and financial loss.

 

In applying this exemption, I am required to consider the application of
the public interest test in section 2(1)(b). In doing so, the Council
appreciates that there is a general public interest in ensuring that it
receives value for money, and is transparent and accountable in how it
spends public funds.  Disclosure of commercially sensitive information
would cause substantial harm to both the Council seeking to obtain the
best value for the citizens of Edinburgh and the third party.

 

Section 36(2)(b) states that information is exempt if its disclosure by
the authority so obtaining it to the public (otherwise than under this
Act) would constitute a breach of confidence actionable by that person or
any other person.  Having considered the information you have asked for,
and the consequences of its release into the public domain, the Council
believes that such a disclosure in these circumstances would be likely to
be in breach of its contractual obligations to the third party. 

 

Section 36(2)(b) is an absolute exemption and there is no need to consider
the public interest test.

 

Please note that this constitutes a formal refusal notice under section 16
of the Act.

 

1. Details of the councils negotiating strategy & correspondence with RBS

 

The details of the transaction are subject to a confidentiality agreement
and exempt from disclosure on that basis. 

2. Any comparison with, or benchmarking of, similar RBS LOBO
renegotiation/ cancellation deals undertaken by English councils with
inverse LOBOs

 

The details of the transaction are subject to a confidentiality agreement
and exempt from disclosure on that basis. 

3. The details of any firm(s) providing external advice on the RBS LOBO
cancellation, the basis of this advice, and the associated cost to council
taxpayers

 

Link Asset Services were appointed to advise on the transaction with an
associated cost of £5,000. 

4. The position/ title and name of council staff directly involved in the
negotiations with RBS and decision to cancel the loans

 

Hugh Dunn, Head of Finance and Innes Edwards, Principal Treasury and
Banking Manager were the key contacts involved. 

5. The calculated savings and formula for determining applicable savings
used by the council to ensure public value for money in this deal

 

The details of the transaction are subject to a confidentiality agreement
and exempt from disclosure on that basis. 

6. The premium or breakage penalty paid by Edinburgh City Council to exit
the £40m RBS LOBOs, and the amortised cost of this break penalty across
the life of the new PWLB loan facility

 

The details of the transaction are subject to a confidentiality agreement
and exempt from disclosure on that basis. 

7. The interest rate given to Edinburgh by the PWLB to refinance the £40m,
also confirming whether this is a fixed or variable/ floating rate loan.

 

The fixed annual rate pertaining to the PWLB refinancing is 1.69%.  

8. Finally, please explain why it took Edinburgh Council an extra 12months
to cancel these RBS LOBO loans than English Councils, and provide the
interest premium paid to RBS over this period of inaction?

 

The City of Edinburgh Council had been in active negotiations over a
significant period of time on the various options available to repay or
restructure these loans.  The repayment of the loans was made when it was
judged that the overall restructuring package represented best value to
the council.   Any interest premium paid is linked to the detail of
settlement which is, in turn, subject to a confidentiality agreement and
exempt from disclosure on that basis.

 

To promote transparency and accountability, please note it is the
Council’s policy to publish all request details and responses made under
the freedom of information legislation. This information will be made
available through the Council’s website and will not include your personal
details. The disclosure log is available at the following link:
[3]http://www.edinburgh.gov.uk/homepage/175...

 

Your right to seek a review

 

If you are unhappy with the way we have dealt with your request, you can
ask us to review our actions and decisions by writing to the:

 

Head of Strategy & Communications

The City of Edinburgh Council

Waverley Court Business Centre 2:1

4, East Market Street

Edinburgh

EH8 8BG or,

Email: [4][email address]

 

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your complaint to the Commissioner within 6 months of receiving our review
response. The Commissioner can be contacted at:

 

The Office of the Scottish Information Commissioner

Kinburn Castle

Doubledykes Road

St Andrews

Fife

KY16 9DS

Telephone: 01334 464610

Fax: 01334 464611

Website: [5]www.itspublicknowledge.info/Appeal

Email: [6][email address]

 

Yours sincerely,

 

 

Sue Brown

Information Rights Officer

 

 

Information Governance Unit

Level 2:1, Waverley Court, Edinburgh EH8 8BG Tel 0131 200 2340

[7][Edinburgh City Council request email]  [8]www.edinburgh.gov.uk

 

 

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4. mailto:[email address]
5. http://www.itspublicknowledge.info/Appeal
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