PWLB briefing
Monthly Activity
PWLB Borrowing Activity — Monthly Commentary
July 2026
KPI Snapshot — Latest Month
| Metric | July 2026 | vs PM | vs LY |
|---|---|---|---|
| £ Borrowed | £368.3m | ▼20% | ▼50% |
| # Loans | 33 | ▼11% | ▼18% |
| WAR % | 5.02% | ▲19bp | ▲53bp |
| WAL (yrs) | 3.7 | ▲8% | ▲19% |
| Borrowers | 19 | ▼34% | ▼24% |
Volume & Activity
July delivered £368.3m across 33 loans, giving back roughly a fifth of June's rebound and running at half of last July's £741.6m. Loan count held up far better than value (33 vs 37), so the shortfall is ticket size rather than a drying-up of activity — average draw fell from £12.5m to £11.2m. The sharper signal is breadth: only 19 distinct borrowers came to the window against 29 in June, a 34% narrowing, and the top five took 67% of principal versus 47.5% last month. July is a concentrated month carried by a handful of larger programmes, not the broad-based participation June showed.
Rate & Tenor
WAR pushed back above the 5% line to 5.02%, up 19bp on June and 53bp on last July — the year-on-year gap is now the widest of the recent run and is the number worth carrying into budget conversations. Part of the month-on-month rise is genuine repricing and part is mix: the concession tilt swung back toward Certainty -20bps, which carries a 40bp smaller discount than HRA. Loan-level rates spanned 4.66% to 6.45%, with the fitted rate-vs-WAL slope at roughly +12bp per year of WAL off a 4.70% one-year intercept — a normally-shaped, positively-sloped term structure with no inversion. WAL extended again to 3.7 years, up 8% on June and 19% on the year, so borrowers paid up and still chose to sit further out.
WAL Distribution & Debt Profile
Every pound raised in July landed in the 1–10 year corridor: 1–3y took £152.0m (41%), 3–5y £118.0m (32%) and 5–10y £98.3m (27%). Nothing priced inside one year and nothing beyond ten — the 10–20, 20–30, 30–50 and 50y+ buckets were all empty for a second consecutive month, so the extension in WAL is a shift within the medium range rather than any return to genuinely long-dated risk.
| Profile | £m | Share | Jun share | WAR |
|---|---|---|---|---|
| Maturity (bullet) | 219.0 | 59.5% | 50.6% | 5.12% |
| EIP | 133.4 | 36.2% | 27.8% | 4.89% |
| Annuity | 15.9 | 4.3% | 21.7% | 4.81% |
Bullet risk rebuilt: Maturity climbed to 59.5% from 50.6%, and the Annuity share collapsed from 21.7% to 4.3% — June's twin £50m HRA annuities had no July counterpart, and what annuity business remained was almost entirely small parish deals. EIP picked up the slack at 36.2%. Net effect: 40.5% amortising against 49.5% in June, so refinancing risk is being taken back on at the same time as headline cost is rising.
Concession
99.7% of principal carried a concession, but the mix reversed sharply from June. Certainty -20bps led at 71.0% (£261.4m, WAR 5.14%) against HRA -60bps at 28.8% (£106.0m, WAR 4.73%) — the exact inverse of June, when HRA held 58%. That 41bp WAR gap between the two tiers is very close to the 40bp difference in the discounts themselves, which is most of the explanation for July's higher headline rate. On the concession × WAL heatmap the hot cells are Certainty at 1–3y (£129.0m) and Certainty at 5–10y (£87.4m), with HRA clustered at 3–5y (£73.0m). Everything above 10 years is empty, as are Local Infrastructure and Project tiers, which saw no activity at all. Non-concessionary borrowing was £0.9m across four small parish and town council loans.
Top Borrowers
| Borrower | £m | Loans | WAR | WAL |
|---|---|---|---|---|
| Croydon LBC | 75.0 | 2 | 5.39% | 6.8 |
| Thurrock BC | 63.0 | 2 | 4.97% | 1.0 |
| Midlothian Council | 40.0 | 1 | 4.66% | 4.3 |
| Kensington & Chelsea LBC | 35.0 | 3 | 4.75% | 5.3 |
| Woking BC | 34.0 | 5 | 4.95% | 1.0 |
| Hertfordshire CC | 20.0 | 1 | 5.03% | 4.3 |
| South Tyneside BC | 20.0 | 1 | 5.03% | 2.3 |
| Harlow DC | 18.0 | 4 | 4.91% | 1.7 |
| North Lanarkshire Council | 15.0 | 1 | 5.19% | 4.3 |
| Shropshire Council | 15.0 | 1 | 4.72% | 1.5 |
Croydon and Thurrock alone account for £138m — 37% of the month, and the top five reach 67%. Kensington & Chelsea and Woking are the only names carried over from June's leaderboard, so this is a genuine rotation of borrowers rather than the same programmes rolling on. Note the spread in borrower-level WAR: Croydon at 5.39% and Midlothian at 4.66% sit 73bp apart, but they are borrowing different products at different tenors — Croydon long Certainty bullets, Midlothian an eight-year HRA EIP.
Notable Transactions
- Croydon LBC — £75m in two Certainty bullets. £40m at 5.14% over 5.8y on 3 July, then £35m at 5.67% over 7.8y on 21 July. The 53bp step is the two years of extra tenor plus three weeks of market drift; both are the same product.
- Thurrock BC — £63m of one-year money. £50m at 4.99% (29 July) and £13m at 4.91% (24 July), both Maturity. Pure short-dated liquidity management, and the single largest ticket of the month.
- Midlothian Council — £40m HRA EIP at 4.66%, 8y tenor / 4.3y WAL, drawn 8 July. The lowest rate in the month and the largest single HRA drawdown.
- Harlow DC — the concession illustration. Two £5m EIP tranches drawn the same day (30 July) on identical 2.32y terms priced at 4.72% and 5.12%. The 40bp gap is exactly the HRA-versus-Certainty discount differential — same market, same day, different product.
- Kensington & Chelsea LBC — £35m across all three profiles on 2 July (Maturity 4.85% / EIP 4.67% / Annuity 4.73%), all HRA -60bps. A textbook blended-profile drawdown.
- Rate ceiling: parish and town councils. Woodsetts PC at 6.45% (25y annuity, £250k) and Yate TC at 6.19% (24.8y annuity, £450k) — both no-concession and very long-dated. These set the top of the range on product and tenor, not on any market repricing.
Treasurer's Note
July is the mirror image of June: less volume, fewer borrowers, higher cost, longer WAL. The 53bp year-on-year rise in WAR is the figure to take into forward budgeting — at £368m of new debt that is roughly £2m a year of extra interest against last July's pricing. Two structural points deserve attention. First, the swing back to Certainty -20bps at 71% of principal explains most of the month-on-month WAR increase; before reading it as the market moving 19bp, check the concession mix in your own programme. Second, amortising profiles fell to 40.5% from just under half, and the entire month priced inside ten years — the sector is rebuilding a bunched 2027–2036 refinancing wall at rates above 5%. If you have HRA-eligible capacity, the Harlow same-day pair is the cleanest evidence available that the tier is worth 40bp for identical terms.
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