Details of LOBO loan borrowing and brokerage arrangements

Joel M Benjamin made this Freedom of Information request to Ealing Borough Council

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The request was partially successful.

Dear Ealing Borough Council,

For each of the Lender Option, Borrower Option (LOBO) loans to which Council is currently party, and for any historical LOBO loans, please provide in Microsoft Excel format:

1) Loan principal
2) Maturity date
3) Trade date when the loan was signed
4) Initial interest rate
5) Current stepped-up interest rate and step-up date, where applicable
6) Any formula or structure determining the interest rate, where applicable
7) The first LOBO option call date
8) The LOBO option call frequency
9) Day count convention used for calculation of interest payments
10) The relevant bank or financial institution(s) which issued the loan
11) The dates on which the lender exercised their option and the proposed interest rate, where applicable
12) The Treasury Management Advisers employed by Council at the time the loan was agreed
13) The broker who arranged the loan (and the brokers involved in any subsequent restructure of the loan)
14) The brokerage fee paid by Council for arranging the loan (and for any subsequent restructure of the loan)
15) Where available, the original, unredacted LOBO loan contracts.

I would very much appreciate it if the answers to parts 1) to 14) were provided in the form of an Excel spreadsheet or CSV file.

The Council has previously refused to disclose some of the above information in response to FOIA requests - see https://www.whatdotheyknow.com/request/l...

Please note that since the initial FOIs were submitted, several complaints against the use of S43(2) to exempt from disclosure the details of LOBO loan borrowing by local authorities, as well as the contracts themselves, have been upheld by the Information Commissioner's Office.

See, for example:
ICO Decision Notice, Swansea https://ico.org.uk/media/action-weve-tak...
ICO Decision Notice, Cornwall https://ico.org.uk/media/action-weve-tak...
ICO Decision Notice, Kingston Upon Thames https://ico.org.uk/media/action-weve-tak...

In particular I would like to draw Council's attention to the following excerpt from the ICO Decision Notice relating to Cornwall Council's use of S43(2):

"Balance of the public interest
31. The Commissioner has given due weighting to the commercial interests which the exemption is designed to protect. He acknowledges that, particularly at a time where there is significant public spending constraints, authorities should be able to engage in activities which promote the best use of limited monies without this being prejudiced by disclosure.

32. However, by the same token, the Commissioner is mindful that the agreements in question relate to long term loans (40 years plus) for sums which exceed hundreds of million pounds and which bind the council to make substantial repayments. It is not the Commissioner’s role to determine whether the council has acted appropriately in its pursuance of LOBO loans but the need for the public to be reassured by being able
to scrutinise relevant information, particularly when such large sums are involved, is a strong public interest factor.

33. In relation to the proposed likely damage to the council’s commercial interests, the Commissioner considers that, whilst this is a genuine concern and carries some weight, it is too vaguely formulated in the face of the more concrete public interest in holding decision-making about vast public expenditure to account. He also considers that disclosure of the information when set against the difficulties envisaged by the council, would be more likely to improve competition amongst lenders and assist public authorities in securing more favourable borrowing rates.

34. In relation to the potential damage to the commercial interests of the lenders, the Commissioner is mindful that, beyond the somewhat generic arguments provided in support of the engagement of the exemption, no specific public interest arguments have been submitted.

35. In terms of the relationship with the council, the Commissioner considers it very unlikely that lenders would wish to deny themselves access to potentially lucrative public sector lending agreements or, in the specific case of the council, would want to withdraw from a long term agreement.

36. In relation to the benefits of disclosure to the lenders’ competitors and the resulting damage to the lenders’ ability to negotiate favourable rates, the Commissioner has not been provided with public interest arguments which specifically identify the severity of or extent of such prejudice. The Commissioner notes the complainant’s argument that negotiations and agreements would be predicated on existing market conditions and the specific state of the council’s accounts and requirements. The Commissioner is not persuaded that there is a significant public interest in maintaining the exemption to avert the disclosure of information which is unlikely to have significant or well defined ill-effects.

37. In light of the above and, having weighed the relevant factors, the Commissioner considers that the public interest balance in this case is weighted towards disclosing the withheld information."

Yours faithfully,

Joel M Benjamin

foirequests, Ealing Borough Council

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foirequests, Ealing Borough Council

1 Attachment

Dear Joel Banjamin,

 

FREEDOM OF INFORMATION ACT 2000 - INFORMATION REQUEST (ACKNOWLEDGEMENT)

 

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Kam Ubhi

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From: Joel M Benjamin <[FOI #541535 email]>
Sent: 02 January 2019 14:14
To: foirequests <[Ealing Borough Council request email]>
Subject: Freedom of Information request - Details of LOBO loan borrowing
and brokerage arrangements

 

Dear Ealing Borough Council,

For each of the Lender Option, Borrower Option (LOBO) loans to which
Council is currently party, and for any historical LOBO loans, please
provide in Microsoft Excel format:

1) Loan principal
2) Maturity date
3) Trade date when the loan was signed
4) Initial interest rate
5) Current stepped-up interest rate and step-up date, where applicable
6) Any formula or structure determining the interest rate, where
applicable
7) The first LOBO option call date
8) The LOBO option call frequency
9) Day count convention used for calculation of interest payments
10) The relevant bank or financial institution(s) which issued the loan
11) The dates on which the lender exercised their option and the proposed
interest rate, where applicable
12) The Treasury Management Advisers employed by Council at the time the
loan was agreed
13) The broker who arranged the loan (and the brokers involved in any
subsequent restructure of the loan)
14) The brokerage fee paid by Council for arranging the loan (and for any
subsequent restructure of the loan)
15) Where available, the original, unredacted LOBO loan contracts.

I would very much appreciate it if the answers to parts 1) to 14) were
provided in the form of an Excel spreadsheet or CSV file.

The Council has previously refused to disclose some of the above
information in response to FOIA requests - see
[1]https://www.whatdotheyknow.com/request/l...

Please note that since the initial FOIs were submitted, several complaints
against the use of S43(2) to exempt from disclosure the details of LOBO
loan borrowing by local authorities, as well as the contracts themselves,
have been upheld by the Information Commissioner's Office.

See, for example:
ICO Decision Notice, Swansea
[2]https://ico.org.uk/media/action-weve-tak...
ICO Decision Notice, Cornwall
[3]https://ico.org.uk/media/action-weve-tak...
ICO Decision Notice, Kingston Upon Thames
[4]https://ico.org.uk/media/action-weve-tak...

In particular I would like to draw Council's attention to the following
excerpt from the ICO Decision Notice relating to Cornwall Council's use of
S43(2):

"Balance of the public interest
31. The Commissioner has given due weighting to the commercial interests
which the exemption is designed to protect. He acknowledges that,
particularly at a time where there is significant public spending
constraints, authorities should be able to engage in activities which
promote the best use of limited monies without this being prejudiced by
disclosure.

32. However, by the same token, the Commissioner is mindful that the
agreements in question relate to long term loans (40 years plus) for sums
which exceed hundreds of million pounds and which bind the council to make
substantial repayments. It is not the Commissioner’s role to determine
whether the council has acted appropriately in its pursuance of LOBO loans
but the need for the public to be reassured by being able
to scrutinise relevant information, particularly when such large sums are
involved, is a strong public interest factor.

33. In relation to the proposed likely damage to the council’s commercial
interests, the Commissioner considers that, whilst this is a genuine
concern and carries some weight, it is too vaguely formulated in the face
of the more concrete public interest in holding decision-making about vast
public expenditure to account. He also considers that disclosure of the
information when set against the difficulties envisaged by the council,
would be more likely to improve competition amongst lenders and assist
public authorities in securing more favourable borrowing rates.

34. In relation to the potential damage to the commercial interests of the
lenders, the Commissioner is mindful that, beyond the somewhat generic
arguments provided in support of the engagement of the exemption, no
specific public interest arguments have been submitted.

35. In terms of the relationship with the council, the Commissioner
considers it very unlikely that lenders would wish to deny themselves
access to potentially lucrative public sector lending agreements or, in
the specific case of the council, would want to withdraw from a long term
agreement.

36. In relation to the benefits of disclosure to the lenders’ competitors
and the resulting damage to the lenders’ ability to negotiate favourable
rates, the Commissioner has not been provided with public interest
arguments which specifically identify the severity of or extent of such
prejudice. The Commissioner notes the complainant’s argument that
negotiations and agreements would be predicated on existing market
conditions and the specific state of the council’s accounts and
requirements. The Commissioner is not persuaded that there is a
significant public interest in maintaining the exemption to avert the
disclosure of information which is unlikely to have significant or well
defined ill-effects.

37. In light of the above and, having weighed the relevant factors, the
Commissioner considers that the public interest balance in this case is
weighted towards disclosing the withheld information."

Yours faithfully,

Joel M Benjamin

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foirequests, Ealing Borough Council

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Dear Joel M. Benjamin,

 

Please find attached response to your recent Freedom of Information/EIR
request.

 

If you are dissatisfied with the handling of your request, you can request
an internal review. 

Details of the Freedom of Information complaints process can be found at:

 

[1]http://www.ealing.gov.uk/info/200640/fre...

 

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If you remain dissatisfied by the outcome of the Internal Review you have
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Information Commissioner's Office

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Kind Regards

 

Information Governance Team (FOI/EIR)

 

Ealing Council

Freedom of Information

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