About the UK Municipal Bonds Agency Plc

What we do

The primary objective of the UK Municipal Bonds Agency is to reduce the debt financing costs of UK local authorities to save them money.  To do this, the UKMBA borrows money, primarily by issuing bonds in the capital markets that are bought by pension funds and insurance companies, and lends that money to UK local authorities.

The other goals of the UKMBA are to:

  • Protect councils from changes to the Public Works Loan Board’s terms and conditions
  • Diversify the funding sources available to local authorities
  • Provide fully transparent financing to local authorities
  • Tailor products to suit local authorities’ needs
  • Reduce risky and excessive borrowing by local authorities
  • Generate economies of scale

Vision and Mission

The UK Municipal Bonds Agency plc will be the most efficient provider of capital finance to UK local authorities.

It will do this by:

  • Issuing bonds and commercial paper
  • Sourcing funding from financial institutions
  • Achieving greater efficiency and transparency than its competitors

Business Case

What was to become the UK Municipal Bonds Agency was established following the publication of a final business case in March 2014.  This document, the Revised Business Case, set out a clear rationale for the establishment of a bonds agency, noting there was ample evidence from Scandinavia, Japan and New Zealand that a bonds agency would deliver ample benefits to local authorities, not least reduced borrowing costs.  Most importantly, the Revised Business Case established a clear justification for a bonds agency on public interest grounds.

A copy of the Revised Business Case can be downloaded here

Following amendments to the guarantee arrangements set out in the Revised Business Case, the UK Municipal Bonds Agency believes that the rationale for its creation has been validated. 

On 5 March 2020, the UK Municipal Bonds Agency issued its inaugural £350 million bond on behalf of Lancashire County Council.  The bond was a 5-year floating rate note, priced at 0.8 per cent over SONIA.  This pricing was significantly better than could be obtained from the PWLB, thereby demonstrating that the UK Municipal Bonds Agency can deliver significant savings for local government, validating the key assumption that led to its creation.  The interest rate was 0.81 per cent below the PWLB 3-month variable rate on the day and 1.08 per cent lower than the 5-year maturity rate.

Company History

The Local Government Association (“LGA”) established the UK Municipal Bonds Agency in June 2014 and subsequently 56 local authorities became shareholders.

Following a lengthy period of gestation, in the summer of 2019 the UKMBA undertook a review of its operations and offer to local authorities.  This review led to the appointment of PFM Financial Advisors LLC (“PFM”), a US company based in Philadelphia, as managed service provider to the Agency. PFM acts for the Agency in most day-to-day matters and delivers the Agency’s operations and financing function.

The Local Government Association delivers the “client function” on behalf of the UK Municipal Bonds Agency i.e. it manages the contract between the with PFM.  It also provides back office services, such as IT, and the company secretariat to the UK Municipal Bonds Agency.

On 5 March 2020, the UK Municipal Bonds Agency completed its inaugural bond issue on behalf of Lancashire County Council.  The issue totalled £350 million and was a 5-year ‘Floating Rate Note’ issued at a significant discount to the rates offered by the Public Works Loan Board.

Contact us

Day-to-Day Contacts:

June Matte           0203 530 7515                           [email protected]

Christian Wall      0203 530 7510                           [email protected]

Company Secretary and LGA Contact:

Vitally Voytenko   020 7664 3128                           [email protected]

Postal Address

UK Municipal Bonds Agency

18 Smith Square

London SW1P 3HZ

Related content

Board of Directors

Supplementary Documentation