Credit quality is at the heart of all debt financing and the interests of the UK Municipal Bonds Agency, local authorities and investors are all aligned towards ensuring that the UK Municipal Bonds Agency maintains a rigorous and smart credit process.
The UKMBA will undertake its own credit ratings of the borrowers and will exclude those whom it believes either do not have the necessary credit standing or whose business model, particularly level of commercial property investment and attendant debt, are deemed excessive.
There are two key principles that underpin the UK Municipal Bonds Agency’s credit process:
The UK Municipal Bonds Agency uses a proprietary credit methodology that is built upon those used by the major credit rating agencies, particularly that of Moody’s. The process is based on four key elements:
These elements are combined to calculate a credit score for each borrower. The score that is required for a local authority to be eligible to borrow through the UK Municipal Bonds Agency is set by the Board and periodically reviewed. In addition, there are a series of “red lines” that should they be crossed by a local authority, automatically mean that a local authority will not be able to borrow e.g. if the accounts of a local authority are qualified.
The credit scoring model generates an idiosyncratic credit score for each local authority. The score is then adjusted in light of the document review, cohort analysis and discussions with the council. The credit scoring model is shown below:
The final credit score is translated into a credit rating:
The Board of Directors periodically reviews the minimum credit rating at which the UK Municipal Bonds Agency will lend to local authorities. Typically, this 3-4 levels below that of the UK sovereign rating, which is Aa2 from Moody’s.
The UK Municipal Bonds Agency has a number of “red lines” in its credit policies that if breached, automatically means that an authority has not passed the credit process. The red lines include matters such as the qualification of the local authority’s accounts and a “Section 114 Notice” being unresolved.
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We may make changes to these Terms at any time and such changes will take effect and be binding upon you from the point at which they are posted on the Website. Therefore, you should check these Terms regularly to make sure you are abiding by the most current version. We may also make changes to the Website from time to time.
The Website is operated by the UK Municipal Bonds Agency Plc (“UK Municipal Bonds Agency”) and registered at Ground Floor 5 – 8 The Sanctuary, London Sw1P 3JS:
We reserve the right to withdraw, suspend or amend access to all or any part of the Website or cease its operation temporarily or permanently at any time without notice.
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We will use reasonable endeavours to ensure that the Website is accessible 24 hours per day but the Website is provided on an “as is” and “as available” basis, and we give no warranties or guarantees that the Website will meet particular levels of availability or functionality. Therefore, we strongly recommend that you do not post any business critical information or material on the Website and that you keep copies of all information and content you post on the Website in accordance with your employer’s policies and processes.
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Where we consider it appropriate, we (or the facilitator of the applicable community) will endeavour to contact you to inform you that a complaint has been received in relation to Content which you have uploaded, the action that we have taken, our evaluation of the allegation, and what steps (if any) we require you to take.
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if any provision of the Terms is found by any Court, or other competent body to be wholly or partly illegal, invalid, void, voidable, unenforceable or unreasonable, that part shall be deemed to be severable from the Terms and the remaining provisions of the Terms shall continue in full force and effect.
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The interpretation, construction, effect and enforceability of these Terms shall be governed by and construed in accordance with English Law. You and we agree to submit to the exclusive jurisdiction of the English Courts.
You can contact us by emailing email@example.com or by writing to us at UK Municipal Bond Agency Plc, 5 – 8 The Sanctuary, London SW1P 3JS
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This website was based on a design by Themes and Co
Photographs on the front slider
“Construction” by Alex Liivet
“New Birmingham Library under construction” by Tony Hisgett
Licensed for reuse under the Creative Commons Licence
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