LOBO loans

Jamie Griffiths made this Freedom of Information request to Greater Manchester Combined Authority

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

The request was successful.

Dear Greater Manchester Combined Authority,

1. How many Lender Option Borrower Option (LOBOs) contracts do you
have on your books?

2. When were they signed? and by whom?

3. With which financial institutions were they taken out?

4. Who advised the council to enter into the LOBO(s)?

5. Since each Contract has been signed, has the lender exercised
their option and changed the interest rate?

6. If so, please specify the dates of the interest rate changes and
the revised interest rates.

7. Please provide a copy of the original, signed LOBO agreements.

Yours faithfully,

Jamie Griffiths

Greater Manchester Combined Authority

3 Attachments

Dear J Griffiths,

Please find attached the response to your Freedom of Information request.

(See attached file: FOI Request GMCA response.pdf)(See attached file: FOI
COR9UBJKQ GMCA V2.xls)(See attached file: Treasury FOIA (GMCA)v2.pdf)

Thanks

Tim

Tim Seagrave CPFA & Cert ITM-PF
Finance Lead - Capital & Treasury Management
Strategic Finance & Accountancy
Tel: 0161 234 3445 (internal 801 33445)
Fax: 0161 274 7013

Manchester City Council
Strategic Planning
Corporate Services
Room 102, PO Box 532, Town Hall, Albert Square
Manchester M60 2LA

[email address]
www.manchester.gov.uk

**********************************************************************
This email and any files transmitted with it are confidential and intended solely for the use of the individual or entity to whom they are addressed. If you have received this email in error please notify the system manager. The full text of the Council's email disclaimer is available at http://www.manchester.gov.uk/emaildiscla....
This footnote also confirms that this email message has been swept for the presence of computer viruses.
Please contact [email address] with any queries.

**********************************************************************

hide quoted sections

Jamie Griffiths left an annotation ()

Option dates on contracts redacted.

Jamie Griffiths

Dear Greater Manchester Combined Authority,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Greater Manchester Combined Authority's handling of my FOI request 'LOBO loans'.

I am grateful for the information provided by the Authority but feel that the response to part 4 ("Who advised the council to enter into the LOBO(s)?") requires clarification and that the response to part 7 ("Please provide a copy of the original, signed LOBO agreements.") is inadequate.

To clarify the response to part 4 can GMCA please confirm that it does not use external Treasury Advisers? If the GMCA does use external Treasury Advisers could those firms acting as Treasury Advisers at the times te LOBO loan agreements were signed please be named?

In response to part 7 the GMCA has refused to provide all the information requested by redacting the Lender Option Dates from the contracts. Presumably the Authority is applying an exemption under Section 43 (2) of the Freedom of Information Act 2000.

If so, the Authority needs to apply both the prejudice test and the pubic interest test in order to rely upon the exemption and there is no evidence that either has been applied here.

Firstly, guidance from the ICO states that "The authority must be able to show how the disclosure of the specific information requested would or would be likely to lead to the prejudice."

While the Authority has asserted that releasing the Lender Option Dates could "prejudice the Authority's commerical interest as a borrower" and "impact the Authority's ability to provide value for money" it has failed to establish a causal link between disclosure and prejudice.

Secondly, the Authority has provided no evidence that it has considered either a general or specific public interest in disclosing the information. In order that the public interest test can be applied correctly please consider:
- Generally, there is a public interest in disclosure in order to ensure there is transparency in the accountability of public funds
- Specifically, there is a public interest in disclosing the LOBO loan agreements in full because LOBO loans are very long term loans and also complex financial instruments with embedded derivatives which could adversely affect the GMCA's financial position and endanger its ability to carry out essential services. There is also considerable likelihood that they represent poor value for money when compared with PWLB loans over the same period. In order to assess the fair value of the loans and make the true financial position of the Authority publicly known it is essential that the contracts are disclosed.

Taking both of these into consideration, particularly the specific public interest in disclosure, I feel it is clear that public interest in disclosure outweighs the potential prejudice to the Authority's future negotiations over LOBO loan terms. The public has a right to know whether such loans represent good value for money or whether they present unneccessary interest rate risks and refinancing risks and have been entered into soley for short-term political expediency.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/l...

Yours faithfully,

Jamie Griffiths

Greater Manchester Combined Authority

Mr Griffiths,

Request for Information - Reference Number: GM/00116

Thank you for your request for information received by the Greater Manchester Integrated Support Team (GMIST) on 29.05.15.

The GMIST provides professional support services on behalf of [the Greater Manchester Combined Authority (GMCA)/AGMA Joint Committee].

We aim to respond as soon as possible.

Please quote the above reference number in any future correspondence.

Yours sincerely

Information Officer
Greater Manchester Combined Authority

-----Original Message-----
From: Jamie Griffiths [mailto:[FOI #258279 email]]
Sent: Thu 28 May 2015 19:28
To: AGMA Info
Subject: Internal review of Freedom of Information request - LOBO loans

Dear Greater Manchester Combined Authority,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Greater Manchester Combined Authority's handling of my FOI request 'LOBO loans'.

I am grateful for the information provided by the Authority but feel that the response to part 4 ("Who advised the council to enter into the LOBO(s)?") requires clarification and that the response to part 7 ("Please provide a copy of the original, signed LOBO agreements.") is inadequate.

To clarify the response to part 4 can GMCA please confirm that it does not use external Treasury Advisers? If the GMCA does use external Treasury Advisers could those firms acting as Treasury Advisers at the times te LOBO loan agreements were signed please be named?

In response to part 7 the GMCA has refused to provide all the information requested by redacting the Lender Option Dates from the contracts. Presumably the Authority is applying an exemption under Section 43 (2) of the Freedom of Information Act 2000.

If so, the Authority needs to apply both the prejudice test and the pubic interest test in order to rely upon the exemption and there is no evidence that either has been applied here.

Firstly, guidance from the ICO states that "The authority must be able to show how the disclosure of the specific information requested would or would be likely to lead to the prejudice."

While the Authority has asserted that releasing the Lender Option Dates could "prejudice the Authority's commerical interest as a borrower" and "impact the Authority's ability to provide value for money" it has failed to establish a causal link between disclosure and prejudice.

Secondly, the Authority has provided no evidence that it has considered either a general or specific public interest in disclosing the information. In order that the public interest test can be applied correctly please consider:
- Generally, there is a public interest in disclosure in order to ensure there is transparency in the accountability of public funds
- Specifically, there is a public interest in disclosing the LOBO loan agreements in full because LOBO loans are very long term loans and also complex financial instruments with embedded derivatives which could adversely affect the GMCA's financial position and endanger its ability to carry out essential services. There is also considerable likelihood that they represent poor value for money when compared with PWLB loans over the same period. In order to assess the fair value of the loans and make the true financial position of the Authority publicly known it is essential that the contracts are disclosed.

Taking both of these into consideration, particularly the specific public interest in disclosure, I feel it is clear that public interest in disclosure outweighs the potential prejudice to the Authority's future negotiations over LOBO loan terms. The public has a right to know whether such loans represent good value for money or whether they present unneccessary interest rate risks and refinancing risks and have been entered into soley for short-term political expediency.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/l...

Yours faithfully,

Jamie Griffiths

-------------------------------------------------------------------
Please use this email address for all replies to this request:
[FOI #258279 email]

Disclaimer: This message and any reply that you make will be published on the internet. Our privacy and copyright policies:
https://www.whatdotheyknow.com/help/offi...

If you find this service useful as an FOI officer, please ask your web manager to link to us from your organisation's FOI page.

-------------------------------------------------------------------

>>Corporate Disclaimer<<
This email and any files transmitted with it are confidential and
intended solely for the use of the individual or entity to whom
they are addressed. If you have received this email in error please
notify the system manager.

Email may be automatically logged, monitored and/or recorded
for legal purposes.

As a public body, the Council may be required to disclose this
email or any response to it under the Freedom of Information
Act 2000 unless the information in it is covered by one of the
exemptions in the Act.

This footnote also confirms that this email has been swept for
the presence of computer viruses.

hide quoted sections

N Dunbar left an annotation ()

Typo refers to "pubic interest test"

Greater Manchester Combined Authority

1 Attachment

Dear Mr Griffiths,

Request for Information - LOBO Loans Internal Review Request

Reference Number: GM/00116

I refer to your request for an Internal Review received by the Greater Manchester Integrated Support Team (GMIST) by email dated 28.05.2015.

You stated;

I am grateful for the information provided by the Authority but feel that the response to part 4 (Who advised the Council to enter into the LOBO(s)?") requires clarification and that the response to part 7 ("Please provide a copy of the original signed LOBO agreements") is inadequate.

To clarify, the response to part 4 can the GMCA please confirm it does not use external Treasury Advisors? If the GMCA does use external Treasury Advisors could those firms acting as Treasury Advisors at the times the LOBO agreements were signed please be named?

In response to part 7 the GMCA has refused to provide all the information requested by redacting the Lender Option Dates from the contracts. Presumably the Authority is applying an exemption under Section 43 (2) of the Freedom of Information Act 2000.

I have reviewed the response dated 8/4/2015 to your initial request and I am satisfied that that response explains that the decision to enter into the LOBO agreements was made by Local Authority Officers, namely the Treasurer of the Greater Manchester Integrated Transport Authority (GMITA), and correctly answers the information request you made at the time.

However, in your request for Internal Review you raised a new point asking for confirmation that we do not 'use External Treasury Advisors'. For the period of 2004-2007 during which the six LOBO agreements were signed on behalf of the GMITA, the Treasury Management Unit did use Capita Asset
Services (formerly two separate companies, Butlers and Sector) as External Treasury Advisors however as previously stated, any decision to enter into a LOBO agreement has been and is made by the Treasurer of the ITA.

I have reconsidered the decision to withhold some information in response to part 7 of your request on the basis disclosure could be prejudicial to the future borrowing of the Authority and have now concluded that on balance the release of the lender option dates would not harm the Authority's commercial interest. This information is now attached. However, I remain of the view that the account details and signatures are exempt from disclosure.

As indicated above, copies of the loan agreements including the lender option dates are now attached to this correspondence.

I trust this clarifies the situation, and provides you with the information you require.

If you are not content with the outcome of the internal review, you have the right to apply directly to the Information Commissioner for a decision.

The Information Commissioner can be contacted at:

Information Commissioner's Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF

Please quote the above reference number in any future correspondence.

Yours sincerely

Julie Connor

Internal Review Officer
Greater Manchester Combined Authority

>>Corporate Disclaimer<<
This email and any files transmitted with it are confidential and
intended solely for the use of the individual or entity to whom
they are addressed. If you have received this email in error please
notify the system manager.

Email may be automatically logged, monitored and/or recorded
for legal purposes.

As a public body, the Council may be required to disclose this
email or any response to it under the Freedom of Information
Act 2000 unless the information in it is covered by one of the
exemptions in the Act.

This footnote also confirms that this email has been swept for
the presence of computer viruses.

hide quoted sections