At Central Bedfordshire we are in the process of creating two Wholly Owned Subsidiary Companies that will be financed through `On-Lending' from the Council.
The Council will seek to take out specific, fixed rate instruments from PWLB and 'On-Lend' to the Companies with an Interest Premium. Conscious of possible State Aid implications, we need to gauge what a reasonable margin / premium would be. Initially we are thinking in the ball park region of 2%. The loan advances to our Companies would be backed by tangible assets / collateral but I understand the rate charged would have to be acceptable to a Commercial Lender.
Therefore would be most grateful to hear from other LA's who have On-Lending arrangements with their Companies, specifically the Interest Premium/Margin levied.