What is it?
A bond is a type of secure loan to a council or government through which money can be raised for major projects. Councils have begun to investigate municipal bonds in the last few years, particularly since the launch of the Municipal Bonds Agency in 2016. Councils typically pay less interest on money loaned through a bond than they would do if it had borrowed through the Public Works Loan Board.
Who’s doing it?
Birmingham: Launching a Brummie Bond to build council housing
Birmingham council has raised £45m to build council housing through selling so-called ‘Brummie bonds’ to pensions and life assurance firm Phoenix Life. The money will go towards home-building, with the interest rate on the bonds lower than that charged by the Public Works Loan Board. The council will use the funds through its Birmingham Municipal Housing Trust, set up by the council in 2009, to build new council housing.
More info here.
Share this post: