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BOND DEAL PAYS FOR NEC REFURBISHMENT

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Brum refinancing to raise£80m...
Brum refinancing to raise£80m

Birmingham City Council has completed a£215m bond exchange deal to finance the refurbishment of its National Exhibition Centre.

Refinancing the bonds has released£40m cash up front to improve the NEC, plus£40m revenue savings over the next five years for the council.

Holders of£215m stock in NEC Finance plc, the company set up to finance the centre, agreed to exchange these for new city council bonds maturing in 2030. The savings were possible because the cost of the new loan is lower than the cost of the original.

The council's acting head of local planning Peter Wright said: 'The NEC brings to Birmingham and the wider West Midlands a market of activity that wouldn't be there if that fantastic facility wasn't there.'

Chairman of the NEC Group Roger Dickens said the refinancing would enable the business to compete internationally.

Council leader Mike Whitby (Con) said: 'The acceptance of this offer by investors demonstrates a continuing enthusiasm by the financial community to invest in Birmingham.'

Birmingham's finance manager Martin Easton said this refinancing of an existing debt was unusual, and was made possible by the prudential borrowing framework.

'Local authorities in the 1980s and 1990s financed a lot of developments off balance sheet. We are now bringing an off balance sheet liability on to the council's balance sheet.'

jennifer.taylor@emap.com

Birmingham's facelift

>> The International Convention Centre opened in 1992 and kicked off the regeneration of the city.

>> Industrial land by the canal (right) was turned into space for offices, leisure and retail outlets.

>> Large parts of the city centre were pedestrianised.

>> The Bull Ring shopping centre, rejuvenated in 2003, is thought to be Europe's largest retail regeneration scheme.

>> The regeneration of the east side of the city centre, another former industrial area, began two years ago.

>> The next project is increasing the capacity of New Street Station by

around 50%.

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