Treasury and Resources
Ministerial Decision Report
COMMUNICATION OF APPOINTED JOINT LEAD MANAGERS AND LEGAL ADVISERS FOR THE STATES OF JERSEY 2014 BOND ISSUANCE
1. Purpose of Report
To enable the Minister to approve the appointments of three joint lead managers and legal advisers for the forthcoming States of Jersey’s Bond Issuance
2. Background
Under the Public Finances (Jersey) Law 2005, the Minister for Treasury and Resources has responsibility to the States for the public finances of Jersey.
On 5 December 2013 the States approved the 2014 Budget (P.122/2013), which included the approval to borrow up to a maximum of £250 million for Housing purposes. The budget included details of the key roles required in order to carry out a public rated bond issuance.
On 22 November 2013 the Minister communicated the high level credit rating Standard and Poor’s (S&P) awarded to Jersey for a long term issuer of AA+. This strong credit rating will support the forthcoming bond issuance.
Since December 2013, work has been underway to carry out appointments for the main roles identified for the Bond Issuance.
Ernst & Young’s capital markets team have provided advice to the Treasury throughout the process to date. They will continue to provide advice throughout the forthcoming bond issuance.
3. Outcome of the two separate open tender processes
In accordance with Financial Direction 5.1 two separate open tenders and interview processes were carried out during January and February 2014 to appoint the joint lead managers (Book Runners) and legal advisers.
The two tenders were very successful and a high standard of responses were received. Following the interview process the following organisations are recommended to be appointed:-
Barclays Bank Plc, London; HSBC Bank Plc , London and The Royal Bank of Scotland Group Plc, London to be appointed as joint lead managers (Book Runners). HSBC will also act as the Principal Paying Agent and Trustee.
Clifford Chance LLP and Carey Olsen to be appointed as legal advisers.
It is recommended that three joint lead managers be appointed in order to ensure that once the bond has been issued that there is strong secondary market liquidity. Bonds that are liquid and regularly traded are sought after and tend to attract tighter pricing, coupled with the fact it makes it easier for holders to sell these instruments in the secondary market.
- Recommendation
The Minister is recommended to approve the following appointments for the forthcoming Bond Issuance by the States of Jersey:-
Barclays Bank Plc, London; HSBC Bank Plc, London and The Royal Bank of Scotland Group Plc, London to be appointed as joint lead managers (Book Runners).
Clifford Chance LLP, London, to be appointed as legal adviser, supported by Carey Olsen.
- Financial and Resource Implications
All resource and financial implications were documented in the 2014 Budget.
Report author : Head of Shareholder Relations | Document date : 24 February 2014 |
Quality Assurance / Review : Treasurer of the States | File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DSs, WRs and SDs\2014-0013 -\WR -Communication of appointed Joint Lead Managers and Legal Advisers for the States of Jersey 2014 Bond Issuance.docx |
MD sponsor : Treasurer of the States |