Bevan Brittan advises London borough on £80m debut private placement

Brent will utilise the funds to finance part of its capital investment programme aimed at regenerating the borough.

Bevan Brittan said that due to strong investor demand, the transaction size was oversubscribed allowing the council to double its initial proposed offering of £40m to a sum of £80m, “demonstrating a robust endorsement of the sector and the council’s prudent financial management”.

The council achieved credit spreads over 60-80bps tighter than the margins offered by the Public Works Loan Board (PWLB), resulting in significant cost savings.

“The favourable terms received provide a strong foundation for future financings from an alternative source of long-term liquidity for the council,” Bevan Brittan said.

The law firm together with EY Capital & Debt Advisory advised Brent on financing options outside the PWLB and negotiation of the transaction documentation on behalf of the council.

Minesh Patel, Director Finance at Brent Council, said: “We are very pleased with the outcome of our debut private placement. This issue evidences the private placement market to be a key player in alternative sources of finance to the PWLB.

“Brent has a very ambitious Capital Programme, which includes the delivery of over 1000 new council homes. So securing competitive rates allows us to ensure these will be genuinely affordable homes for our residents.”

David Moore, Partner at Bevan Brittan, said: “Bevan Brittan is thrilled to have advised the council on its first private placement financing and particularly that it has achieved preferential rates to the PWLB equivalent offering in such a changeable market. The result is a demonstration of the strong business case put together by the experienced Brent management team and the potential the council presented for ongoing future investment.

“Brent and a handful of other councils over the last six months have helped to pave the way for others to follow by educating investors on the credit worthiness of local authorities and in doing so opened the door to valuable alternative sources of finance.”