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Information and public services for the Island of Jersey

L'înformâtion et les sèrvices publyis pouor I'Île dé Jèrri

Revolving Credit Facility: Exercise of First Extension Option

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

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A decision made on 7 April 2021

Decision Reference: MD-TR-2021-0039

Decision Summary Title:

Revolving Credit Facility – Exercise of First Extension Option

Date of Decision Summary:

31st March 2021

Decision Summary Author:

Director of Treasury and Investment Management

Decision Summary:

Public or Exempt?

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

n/a

Written Report

Title:

Revolving Credit Facility – Exercise of First Extension Option

Date of Written Report:

31st March 2021

Written Report Author:

Director of Treasury and Investment Management

Written Report :

Public or Exempt?

Exempt – Article 26

Subject: Exercise of the First Extension Option of the Revolving Credit Facility (“RCF”)

Decision(s): The Minister for Treasury and Resources decided to:

  • Exercise the First Extension Option.
  • Authorise the Treasurer of the States to complete the documentation required to exercise the First Extension Option and ensure it is signed in accordance with the Authorised Signatory List.

 

Reason(s) for Decision: The Coronavirus pandemic has had a severe social and financial impact on the lives of Islanders and presents a significant level of challenge for Jersey’s economy. During this unprecedented period of uncertainty for the Island, it is vital that the Minister for Treasury and Resources can make available sufficient funds to support Islanders and businesses on a timely basis.


In signing MD-TR-2020-0029 the Minister declared an immediate threat to the health or safety of any of the inhabitants of Jersey and to the stability of the economy in Jersey and was satisfied that those circumstances require the application of the modifications set out in Article 24(9) of the Public Finances (Jersey) Law 2019, as amended by Public Finances (Amendment of Law) (Jersey) Regulations 2020 (“Public Finances Law”).  

Following the modification to the Public Finances Law the Minister made the substantive decision, in signing MD-TR-2020-0051, to enter into a Revolving Credit Facility on behalf of the States of Jersey for the maximum sum of £500million. The terms and conditions of this facility included options to extend the termination date by a further 12 or 24 months at specific pre-determined dates.

 

Subsequently, in approving P.120/2020 (Government Plan 2021-24), the States Assembly agreed to approve the proposed borrowing as set out in the report accompanying that Proposition, with a maximum borrowing limit of £385.953million (Inclusive of the financing of the Fiscal Stimulus Fund).

 

The full social and economic impacts of the pandemic, including the possibility of a third wave of infections and further restrictions, are yet to be realised and the full costs are unknown. Exercising the First Extension Option continues to provide the Minister with the greatest level of flexibility, alongside the investment portfolio, to manage the current and any future economic stimulus measures that are required.

 

Having the RCF available for an additional period of 12 months provides the Minister with sufficient contingency options for responding to both the pandemic and any other unforeseen events. It also provides sufficient time to properly consider the requirements for debt over the medium-term and provides access to liquidity through to the end of 2022 as required by forecasts.

 

Resource Implications: The administration for exercising the First Extension Option is part of the day-to-day activity of the Treasury & Exchequer. The estimated annual finance costs are included within the Government Plan 2021-24 Annex.

 

Action required: The Head of Financial Governance to advise the Director of Treasury and Investment Management when the Ministerial Decision is signed. The Director of Treasury and Investment Management to arrange for the Extension Option to be exercised in accordance with the terms of the RCF Agreement.

 

Signature:

 

 

Position: 

Deputy Susie Pinel

Minister for Treasury and Resources

Date Signed:

 

Date of Decision

 

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