Partington: Greater Manchester Investment Fund

Edgar Russell made this Freedom of Information request to Greater Manchester Combined Authority

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The request was successful.

Dear Greater Manchester Combined Authority,

I ask if you can give more detailed information on the arrangements made using public funds with Peel for the Partington development than is in the newspapers and press releases.

A. What is the date that the contract was entered into with Peel offering the loan for the Partington development?

B. How much is the capital element of the loan to Peel for the Partington development?

C. What is the interest rate applied to the loan to Peel for the Partington development? How was this figure reached?

D. Has the Combined Authority or any of the Councils within the Combined Authority leased or transferred the freehold of any land to Peel for £1 or nil consideration within the last five calendar years?

In advance I thank you for this information.

Yours faithfully,

Edgar Russell

Greater Manchester Combined Authority

Dear Mr Russell,

Request for Information - Reference Number: GM/00122

Thank you for your request for information received by the Greater Manchester Integrated Support Team (GMIST) ON 01/07/15.

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 and no later than 20 working days following the date of receipt.

If this timescale needs to be extended to consider whether or not the public interest favours a qualified exemption under the 2000 Act being maintained, you will be notified of this.

Please quote the above reference number in any future correspondence.

Information Officer

GMIST

Room 308 Manchester Town Hall
________________________________________
From: Edgar Russell [[FOI #277789 email]]
Sent: 01 July 2015 20:15
To: AGMA Info
Subject: Freedom of Information request - Partington: Greater Manchester Investment Fund

Dear Greater Manchester Combined Authority,

I ask if you can give more detailed information on the arrangements made using public funds with Peel for the Partington development than is in the newspapers and press releases.

A. What is the date that the contract was entered into with Peel offering the loan for the Partington development?

B. How much is the capital element of the loan to Peel for the Partington development?

C. What is the interest rate applied to the loan to Peel for the Partington development? How was this figure reached?

D. Has the Combined Authority or any of the Councils within the Combined Authority leased or transferred the freehold of any land to Peel for £1 or nil consideration within the last five calendar years?

In advance I thank you for this information.

Yours faithfully,

Edgar Russell

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Greater Manchester Combined Authority

Dear Mr Russell,

Thank you for your request for information made to the Greater Manchester Combined Authority on 02.07.15.

You asked for more detailed information on the arrangements made using public funds with Peel for the Partington development than was available in the newspapers and press releases. On your behalf we have contacted officers who support the Greater Manchester Invesment Fund and the answers to your specific questions are as set out below -
A. What is the date that the contract was entered into with Peel offering the loan for the Partington development?

The initial offer letter to the borrower is dated 22nd November 2012 and the detailed facility agreement
for the loan was completed on 12th June 2013.

B. How much is the capital element of the loan to Peel for the Partington development?

The capital element of the loan offered to Peel is £4.5m

C. What is the interest rate applied to the loan to Peel for the Partington development? How was this figure reached?

In order to comply with EU State Aid regulations, a market rate of interest rate must be charged, or the proxy rates set by the commission in “Communication from the Commission on the revision of the method for setting the reference and discount rates” (2008/C 14/02). This is calculated by the following: EU Reference Rate + Margin = Lending Rate. The Base Rate is published on http://ec.europa.eu/competition/state_ai.... For the purposes of this Loan the UK rate of 1.02% has been used, last updated on 1 July 15. The margin is a function of the risk of the level of collateral provided, or Loss Given Default (LGD) and the rating category of the Borrower. This ranges from 60bp (0.6%) to 1000bp (10%)depending on the level of risk.

Interest rates as at 01/07/15

Level of collateral

Rating category

High

Normal

Low

Strong (A-AAA)

1.62%

1.77%

2.02%

Good (BBB)

1.77%

2.02%

3.22%

Satisfactory (BB)

2.02%

3.22%

5.02%

Weak (B)

3.22%

5.02%

7.52%

Financial difficulties

5.02%

7.52%

11.02%

The lending rate matrix is shown above. Whilst the actual interest rate charged on the loan to Peel is not disclosed on grounds of commercial sensitivity, it has been appraised using the above matrix taking into account the covenant strength of the borrower and the security offered.

D. Has the Combined Authority or any of the Councils within the Combined Authority leased or transferred the freehold of any land to Peel for £1 or nil consideration within the last five calendar years?

We are not aware of any GMCA land transfers or leases for either £1 or £nil over the last five calendar years, however this response relates to GMCA only. The response does not cover the arrangements within the individual GM districts and separate FoI requests should be submitted to each Local Authority so that they may respond for each of their relevant areas.

I hope this information meets your request however, if you are not satisfied with this response you may ask for an internal review. If you wish to complain you should contact Julie Connor, Head of GMIST, whose email address is [email address]

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 remember to quote the reference number above in any future communications.

Yours sincerely

Information Officer
GMIST

Room 308 Manchester Town Hall

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Edgar Russell left an annotation ()

Thank you for the excellent response.