Issue - meetings

This report asks the Executive to recommend to full Council the proposed Prudential Indicators for 2007/08 to 2010/11, an integrated Treasury Management Strategy Statement, and the use of Lender Options Borrower Options (LOBOs) for debt restructure purposes.

Members considered a report which asked them to recommend to full Council the proposed Prudential Indicators for 2007/08, an integrated Treasury Management Strategy Statement, and the use of Lender Options Borrower Options (LOBOs) for debt restructure purposes.

The Council was required to set Prudential Indicators (PIs) to ensure that its capital investment plans were affordable, prudent and sustainable.  The PIs for 2007/08-2010/11 were illustrated and explained in Annex A to the report.  The annual investment strategy reviewed projected interest rates over the next 3 years and sought to maximise returns to the Council, whilst minimising risks.  In view of the significant capital investments which the Council was set to make over the next five years, the borrowing strategy aimed to minimise the risks of borrowing large amounts in any single year by giving the flexibility to borrow in advance, taking advantage of favourable interest rates as they arose.

Currently, the Council could restructure its debts by the use of Public Works Loans Boards (PWLBs).  Another potential option was available in the form of Lender Options Borrower Options (LOBO) loans, which were offered by large financial institutions such as banks and offered very cheap primary period rates.  It was therefore suggested that the Council restructure a limited amount of its current short term maturity PWLB debt into lower rate LOBO debt with matching primary periods.