County Hall bosses in Preston are looking at ways of slashing the amount of interest it pays on it’s debts.
Lancashire County Council has agreed to look into setting up a new financial programme in a bid to reduce the amount it spends on borrowing.
The Euro Medium Term Note (EMTN) programme - under which the county council could issue bonds and other forms of debt securities - is likely to be worth at least £250m.
It will help to protect the council from the impact of future increases in interest rates, but it is not yet clear how this will affect the council’s need to shave £300m off its budget over the next few years.
County financiers say the programme is likely to attract overseas interests, central banks, pension funds and investment funds.
County Councillor Jennifer Mein, leader of the council, said: “The EMTN programme is part of our medium- to long-term plans for managing the council’s finances by ensuring the ! council is protected from increases in interest rates.
“Having clear plans in place will give us a safe and reliable mechanism as part of our overall financial strategy.
“We’re particularly pleased that this plan was developed by people from our own in-house finance team. They’ve used many years of private sector experience in this field to bring together a plan that will help the council minimise its borrowing costs.”
The initial plans were approved by the county council’s cabinet. A further report confirming the details of the EMTN programme will be presented to the cabinet later in the year.
The council has a credit rating of AA2 from Moody’s - their third-highest rating and one point below the UK government. This is a global credit rating highlighting the county council’s strength as a borrower, which will help to attract people to its EMTN programme.
Now that the cabinet have given approval, arrangements will ! now be put in place, with the aim of announcing details of the bond, including timescales and duration, over the next few months.