PWLB briefing
Monthly Activity
PWLB Borrowing Activity — Monthly Commentary
May 2026
KPI Snapshot — Latest Month
| Metric | May 2026 | vs PM | vs LY |
|---|---|---|---|
| £ Borrowed | £146.8m | ▼44% | ▼44% |
| # Loans | 23 | ▼30% | ▼23% |
| WAR % | 5.01% | ▲1.6% | ▲8.0% |
| WAL (yrs) | 2.6 | ▼22% | ▼44% |
Volume & Loan Activity
May extended the post-financial-year-end lull. Just £146.8m was raised across 23 loans from 20 borrowers — down 44% on April and, unusually, down 44% on the same month last year as well, so volume now sits well below both its recent and seasonal baselines. Activity stayed concentrated: the top five borrowers accounted for roughly 77% of principal, led by two £30m deals and a pair of Woking tranches, with the remaining names clustered at £2–15m.
Rate & Tenor
WAR rose a further 8bp to 5.01%, the first time the monthly weighted average has printed above 5% in the last twelve months and 37bp higher than May 2025. The headline masks a wide spread — from 4.61% on short, concessionary local-authority maturity loans up to 6.62% on a 50-year parish-council annuity carrying no concession. Across the cohort, rate rose with term at roughly 16bp per year of WAL; the rate outliers are all small, long-dated parish and town council deals priced without a concession, not a market-wide repricing.
WAL Mix & Debt Profile
WAL shortened sharply to 2.6 years (down 22% on April, down 44% on last year). Issuance was heavily front-loaded: the 1–3y bucket took 66% of principal and the 3–5y bucket a further 24%, leaving almost nothing beyond ten years. By profile, Maturity (bullet) dominated at 66%, with Annuity at 23% and EIP at 11% — borrowers are favouring short bullets and the refinancing optionality they preserve over locking in long-dated amortising debt at current rates.
Concession
| Concession | £m | Share | Hot cells (WAL) |
|---|---|---|---|
| Certainty -20bps | 69.3 | 47% | 1–3y & 3–5y |
| HRA -60bps | 69.0 | 47% | 1–3y |
| None | 8.5 | 6% | long-dated parish loans |
Concessionary borrowing made up 94% of principal, split almost exactly between Certainty -20bps (47%) and HRA -60bps (47%). The heatmap clusters tightly in the 1–3y row across both products; HRA is concentrated wholly in short tenors while Certainty extends into 3–5y. The 80/100bps capitalisation tiers and everything beyond 5–10y were unused this month.
Top Borrowers
| Borrower | £m | Loans | WAR | WAL |
|---|---|---|---|---|
| Kensington & Chelsea LBC | 30.0 | 1 | 4.73% | 2.8 |
| Croydon LBC | 30.0 | 1 | 5.34% | 4.1 |
| Woking BC | 28.4 | 2 | 5.06% | 1.0 |
| Mid Suffolk DC | 15.0 | 1 | 4.68% | 1.0 |
| Thanet DC | 10.0 | 1 | 4.95% | 5.3 |
Notable Transactions
The two largest deals illustrate the product/rate logic rather than any timing effect: Kensington & Chelsea took £30m as an HRA -60bps annuity at 4.73%, while Croydon's £30m came as a Certainty -20bps maturity loan at 5.34% — the 61bp gap reflects the deeper HRA concession and shorter effective life, not a move in the market between the two trades. Woking split its borrowing into two short Certainty maturity tranches (£22m and £6.4m, both 1y). At the long end, a Great Chesterford parish 50-year annuity priced at 6.62% with no concession sits as the cohort's rate ceiling.
Treasurer's Note
May confirms the pattern April hinted at: thin post-FYE volumes, a rising cost of carry (WAR now above 5%), and borrowers deliberately staying short. With 90% of principal in sub-five-year tenors and Maturity bullets dominant, authorities are paying up but keeping refinancing optionality open rather than terming out at elevated long rates. The near-even Certainty/HRA split and 94% concessionary share show the discounts are doing the heavy lifting on headline cost. For planning, treat the wide 4.6–6.6% range as concession- and tenor-driven, not evidence of a single market rate — price each tranche against the relevant product.
For information only; not financial advice. Always verify rates directly with PWLB before making borrowing decisions.
Source: UK Debt Management Office — dmo.gov.uk/responsibilities/local-authority-lending/current-data