The Greater London Authority has finalised a £600m bond issue with Lloyds Bank Corporate Markets to help fund Crossrail.
The move, announced by mayor of London Boris Johnson, will save business rate payers £65m.
The bond raises finance towards the GLA’s share of Crossrail’s £14.8bn construction costs.
The GLA had previously raised £800m through the government’s public works loan board.
This is repaid through the Crossrail Business Rate Supplement (BRS) collected from the capital’s larger businesses.
However, last October the government made borrowing through the board around 1% more expensive.
The subsequent agreement with Lloyds is the first time in 17 years that a local authority has issued a bond to raise capital finance and the GLA intends to use this type of borrowing for further funding of its capital programme.
Johnson said: “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.”
Nick.whitten@estatesgazette.com
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