Lot­tery deal and bor­row­ing boost cof­fers

Canal Boat - - News -

As the Canal & River Trust seeks to build up its in­come for the fu­ture (see above), it has be­gun bor­row­ing money to boost its com­mer­cial in­vest­ment port­fo­lio (and the rental in­come it re­ceives from this), while the sup­port it re­ceives from the Peo­ple’s Post­code Lot­tery has also risen.

CRT’s chief executive Richard Parry told Canal Boat that some £150m of ‘pri­vate bor­row­ing’ over a 25 to 35-year timescale had been se­cured via a ‘bond is­sue’ at rates of around 3 per­cent. He explained this is “not money to spend”, but to put into long term in­vest­ments (such as prop­erty) which will bring in nearer 6 per­cent, and that the net ex­tra in­come to the Trust (once ex­ist­ing short-term bor­row­ings are re­paid) would be around £2-3m per year. The Trust stressed that it “doesn’t have to do this” as a re­sult of any short­fall, but that “it makes good in­vest­ment sense” to do this, “in com­mon with other bor­row­ers such as hous­ing as­so­ci­a­tions”, in a way that was not avail­able to its pre­de­ces­sor Bri­tish Wa­ter­ways.

Mean­while the Peo­ple’s Post­code Lot­tery’s back­ing has also boosted CRT’s in­come. Since be­com­ing a PPL ‘di­rect ben­e­fi­ciary’, the Trust re­ceives in­come from two draws per year run en­tirely for its ben­e­fit, re­sult­ing in a to­tal con­tri­bu­tion of £1.7m per year. This year’s is be­ing largely spent on work at Marple.

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