Loan Procurement Procedures

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As per the May 2014 Q&A, we are seeking your thoughts on Loan Procurement Procedures:

1. Every year we ask a number of financial institutions to provide “interest rate quotes” for a variable loan and a fixed rate loan scenario (usually a 25 year loan).

We typically ask them to quote a margin above BBSY for both scenarios, with the aim of being able to compare like for like.

Despite this, each year we have difficulties with the institutions quoting on a different basis, making it difficult to compare quotes.

Do you have any insight into how other NSW Councils ask for quotes – i.e. are they asking for margins above BBSY – which may make the process more successful?

2. For the last few years, we have requested quotes for a loan term of 25 years for both fixed and variable scenarios, as this is our preferred term.

Increasingly however we are finding fewer institutions who are willing to quote/offer 25 years, making the process ever more difficult.

Again do you have any insight as to the loan terms other Councils are requesting / drawing down?