Warrington Borough Council has issued a £150m bond to fund its capital programme, with the bulk of the money to be spent on a town centre development scheme.
In doing so, it has become the first UK local authority outside London to enter the bond market for more than 10 years.
Warrington said that £50m had been sold to a UK insurance company. The authority believes that this initial sale will save up to £12m in interest costs over the term of its borrowing.
The remaining £100m has been retained by the council to provide access to future funding.
The local authority said the bond issue was similar to the £200m CPI-linked bond issued earlier this year by the Greater London Authority, “except that Warrington’s bond ensures that increases in the CPI-linked coupon are limited to 3% per annum, and Warrington’s retained bonds provide future funding flexibility”.
Cllr Russ Bowden, Warrington’s executive board member for corporate finance, said: "This is a great example of the public and private sectors coming together and delivering an innovative solution to bear down on borrowing costs. I hope this is a model local government can develop.
“The bond structure has enabled us to save on our borrowing costs, diversify our borrowing portfolio and promote the new commercial ethos that the council operates under."