Mayor of London Boris Johnson has secured a £600 million bond issue to help finance the city’s Crossrail project.
The bonds will be issued in association with Lloyds Bank Corporate Markets—the first time for 17 years that a local authority has gone to the capital markets for finance in this way.
The planned Crossrail rail route, the newest rail line in the country and the biggest single extension to the south-east network in half a century, will connect Maidenhead in Berkshire with Shenfield in Essex, passing through the West End and Canary Wharf.
For an estimated cost of £17 billion, it will add 10 per cent to the capital’s rail capacity and bring an additional 1.5 million people within 45 minutes commuting distance of London's key business districts. By carrying an anticipated 200 million passengers per year, it will bring much needed relief to other parts of the rail and road network.
The process began in 2005 when a bill to build the railway was introduced to parliament. After three years of consultation and scrutiny in both houses of parliament, the Crossrail Bill was enacted in July 2008, with Royal Assent turning an idea into the beginning of reality.
"Crossrail is going to transform our city but it must be cost-effective, especially for London's businesses,” said Johnson. "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 for other important improvements we make to the capital and beyond."
The co-head of Lloyds Bank Corporate Markets Andrew Geczy said: "It is more than 17 years since a mainstream local authority has secured finance via the public markets, so this transaction is significant as well as innovative.
"We are delighted to have assisted the GLA to access the public markets and we fully expect other local authorities to follow their lead."
London’s borrowing for the scheme is to be repaid by a Business Rate Supplement levied on the capital’s largest businesses.
