German lender pbb Deutsche Pfandbriefbank has expanded its public investment finance business to cover the UK as the fifth local market in addition to France, Germany, Spain and the Nordic region.
In February the bank signed its first transaction with a UK Local Authority, providing two forward starting fixed interest rate loans totalling £20 mln (€25 mln) to Midlothian Council, Scotland.
The borrower will use the proceeds of the loans to finance its loans pool and to repay existing debt which was utilised to finance long-term investments in vital services including new schools, social housing, utilities (including waste management), health and care facilities.
'The UK market offers opportunities for a specialist lender focusing on public investments. The current marketplace enables local authorities to pursue more innovative and competitive financing arrangements making it attractive to specialist lenders with in-depth knowledge,' said Pbb's management board member Bernhard Scholz.
Jean Christophe, head of Public Investment Finance at pbb Deutsche Pfandbriefbank, added: 'We believe the loan with Midlothian Council can be the first of many.'
