States of Jersey revolving credit facility (FOI)

Request

In relation to the signing by the Minister for Treasury and Resources of the Ministerial Decision relating to the Revolving Credit Facility (RCF) for the maximum sum of £500 million please can you provide the following?

• a copy of the full terms of the RCF to include all supporting documentation

If not contained within the above documents (or if you are unable to supply all the above) please also provide the following:

A breakdown of all fees / charges paid (no matter how arising) in relation to the entering into of the facility to include:

• the total amount of fees paid

• the full name of the recipient of the fees to include their place of business (Jersey or elsewhere)

• the services provided by each of the above in relation to the RCF

• the amount of the fees paid to each of the above

A note of any other fees that will be due to be paid under the facility during the two year initial period to include:

• the estimated total amount of fees payable

• the full name of the recipient of the fees to include their place of business (Jersey or elsewhere)

• the services to be provided by each of the above in relation to these fees

• the amount of the fees payable to each of the above

Please also provide the rate of interest to be charged on any draw-down of the facility to include details of whether this rate changes should there be multiple draw-downs.

Please provide details of any other costs / charges / interest not included above, that arise directly or indirectly from any draw-down.

Please provide details of any other costs / charges / interest not included above, that arise directly or indirectly from entering into the RCF.

Should the RCF be required for a period of greater than the initial two year period what fees have been agreed in order to extend the facility?

Should sums still be outstanding at the end of the initial two year period what rates of interest / charges have been agreed in order to extend the facility?

Response

The States of Jersey (SOJ) and the Lenders are bound by the Confidentiality Undertakings which form part of the Revolving Credit Facility (RCF) Agreement. These undertakings do not permit the release of any information relating to the finance documents or the RCF and Article 26 (Information supplied in confidence) of the Freedom of Information (Jersey) Law 2011 has been applied.

As an absolute exemption is being applied the request can be refused without a public interest test (as per the guidance of the Jersey Office of the Information Commissioner) however the following rationale is provided simply to assist with understanding.

In signing and entering into the RCF, SOJ has agreed that all elements of the agreement, any accompanying finance documents and information provided during the negotiation of the terms of the facility would be bound by a Confidentiality Undertaking. As a result of this undertaking, the disclosure of the information to the public would constitute a breach of confidence (Article 26b).

Article applied

Article 26 Information supplied in confidence

Information is absolutely exempt information if –

(a) it was obtained by the scheduled public authority from another person (including another public authority); and

(b) the disclosure of the information to the public by the scheduled public authority holding it would constitute a breach of confidence actionable by that or any other person.

Internal Review request

I must admit I am a little surprised by your contention that all the questions asked in the original request are covered by Article 26 and would be grateful for a formal review.

I note that additional time was requested to respond to this request and therefore I would have expected an immediate response if the matter was so clear cut.

I find it difficult to understand you statement that “SOJ has agreed that all elements of the agreement, any accompanying finance documents and information provided during the negotiation would be bound by a Confidentiality Undertaking” but you happily issued a press release https://www.gov.je/news/2020/pages/creditfacility.aspx which is still on the website listing all the relevant parties and other information contained within the RCF. It being noted that other parties have issued similar press releases which would also appear to be in contravention of Article 26 if it was interpreted as strictly as you suggest.

I detail below the original request and would be grateful if you will confirm in relation to each separate request why you feel that this information cannot be supplied.

In relation to the signing by the Minister for Treasury and Resources of the Ministerial Decision relating to the Revolving Credit Facility (RCF) for the maximum sum of £500 million please can you provide the following?

• A copy of the full terms of the RCF to include all supporting documentation;

You have stated that this is covered by Article 26. Please can you confirm that the nature of this debt will be disclosed in full in the States Accounts – please explain why you are able to disclose this facility fully in the public accounts of the States and not to me under a simple FOI request. If you are proposing not to disclose in the States accounts please provide the relevant accounting standards that will permit you to do so.

If not contained within the above documents (or if you are unable to supply all the above) please also provide the following:

A breakdown of all fees / charges paid (no matter how arising) in relation to the entering into of the facility to include:

• The total amount of fees paid;

The fees are as a result of entering into the agreement and not the agreement themselves and therefore should not be covered by Article 26. Please expand on why you believe Article 26 is in point?

• The full name of the recipient of the fees to include their place of business (Jersey or elsewhere);

Please see above and also the press release issued – please again advise why you believe this is covered by Article 26 especially as you have already divulged most of the parties ? Was not the press release a breach already if your contention is correct?

• The services provided by each of the above in relation to the RCF;

The fees are as a result of entering into the agreement and not as a consequence of the agreement itself and therefore should not be covered by Article 26. Please expand on why you believe Article 26 is in point?

• The amount of the fees paid to each of the above.

The fees are as a result of entering into the agreement and not the agreement themselves and therefore should not be covered by Article 26. Please expand on why you believe Article 26 is in point?

• A note of any other fees that will be due to be paid under the facility during the two year initial period to include:

• The estimated total amount of fees payable;

The fees are as a result of entering into the agreement and not the agreement themselves and therefore should not be covered by Article 26. Please expand on why you believe Article 26b is in point ? I appreciate that one may be able to argue that the rate of interest to be charged on any draw-down of the facility to include details of whether this rate changes should there be multiple draw-downs may be protected under Article 26 but would again expect full disclosure of this substantial liability within the States accounts.

• Please provide details of any other costs / charges / interest not included above, that arise directly or indirectly from any draw-down.

This clearly is not covered in its entirety by Article 26 as it relates to payments inside and outside of the Agreement – please supply full details or a detailed rationale as to why the information is not being provided.

• Please provide details of any other costs / charges / interest not included above, that arise directly or indirectly from entering into the RCF.

This clearly is not covered by Article 26 as it relates to payments inside and outside of the Agreement – please supply full details or a detailed rationale as to why the information is not being provided.

• Should the RCF be required for a period of greater than the initial two year period what fees have been agreed in order to extend the facility?

The above looks beyond the facility so would be surprised if this is solely covered within the Agreement – would it be possible to have sight of the relevant confidentially clauses upon which you are placing reliance.

• Should sums still be outstanding at the end of the initial two year period what rates of interest / charges have been agreed in order to extend the facility?

The above looks beyond the facility so would be surprised if this is solely covered within the Agreement – would it be possible to have sight of the relevant confidentially clauses upon which you are placing reliance.

Internal Review Response

This Internal Review was undertaken by two senior members of the Government of Jersey, independent of the original response.

The reviewers sought to respond to each query raised by the requester in turn (questions italicised for ease of reference);

I find it difficult to understand you statement that “SOJ has agreed that all elements of the agreement, any accompanying finance documents and information provided during the negotiation would be bound by a Confidentiality Undertaking” but you happily issued a press release https://www.gov.je/news/2020/pages/creditfacility.aspx which is still on the website listing all the relevant parties and other information contained within the RCF. It being noted that other parties have issued similar press releases which would also appear to be in contravention of Article 26 if it was interpreted as strictly as you suggest.

There is a public expectation that wherever possible Government provides regular updates in relation to its general activity and more importantly during the period of the Covid-19 pandemic the actions Government has taken to support individuals, businesses and the Island’s economy.

The content of the Government’s media release only includes the amount and duration of the facility, and the names of the banks and advisers involved. The content of this media release was agreed in advance by all parties.

A copy of the Media Release is attached below:

Revolving credit facility Press Release

• A copy of the full terms of the RCF to include all supporting documentation;

You have stated that this is covered by Article 26. Please can you confirm that the nature of this debt will be disclosed in full in the States Accounts – please explain why you are able to disclose this facility fully in the public accounts of the States and not to me under a simple FOI request. If you are proposing not to disclose in the States accounts please provide the relevant accounting standards that will permit you to do so.

The Revolving Credit Facility will be classified as a liability, measured at amortised cost in the Government’s annual accounts. This is in accordance with the relevant IFRS accounting treatment. The liability to be recorded will be dependent on the amount drawn as at 31 December 2020.

Whilst the accounts are not yet prepared, they are likely to reference identical information to that which is already produced in the media release.

If not contained within the above documents (or if you are unable to supply all the above) please also provide the following:

A breakdown of all fees / charges paid (no matter how arising) in relation to the entering into of the facility to include: 

• The total amount of fees paid;

The level of fees payable in relation to the RCF are included within the bundle of confidential documents known as the “Finance Documents”, the contents of which are covered by Article 26

The fees payable to the debt adviser are covered by their terms of engagement which includes confidentiality clauses over which Article 26 applies.

The fees payable to legal counsel are covered by their individual terms of engagement which includes confidentiality clauses over which Article 26 applies.

The review panel discussed whether disclosure of the total fees paid would breach the confidentiality clauses of the documentation, After due consideration is was decided that the public interest in maintaining the confidentiality clause in totality, exceeded the public interest in the amount of fees paid. 

The panel further discussed the potential implications for a) a breach in confidentiality and b) a perceived breach in confidentiality, and agreed that either would be detrimental to the financial interests of the Government of Jersey. They considered that the potential withdrawal of parties from the Revolving Credit Facility due to a breach in the confidentiality clauses by the States of Jersey was a legitimate and concerning risk, such outcome being exceedingly prejudicial to the economic interests of Jersey. They therefore considered that Article 34 (The Economy) of the Freedom of Information (Jersey) Law 2011, was also strongly engaged. Further detail in relation to the application of Article 34 is provided within the Appendix.

With respect to the Accounts, these costs will be spread over the life of the facility but will not be directly identifiable as costs associated with the RCF. The wording for the Accounts has not been finalised but it will just summarise the total facility amount agreed (£500m), the date it was agreed on (7 May), the banks involved (as per media release) and the amount drawn down as at the 31st December 2020. All of this information, except the amount drawn at 31/12, is already in the public domain.

• The full name of the recipient of the fees to include their place of business (Jersey or elsewhere);

The fees payable to each party are agreed confidentially and covered by the application of Article 26.

The media release does not confirm that all parties received fees for their contribution to the transaction. The content of the media release was agreed in advance by all parties.

A copy of the Media Release is enclosed for reference.

• The services provided by each of the above in relation to the RCF;

Please see above – all fees are agreed and covered by confidentiality clauses within their individual terms of engagement to which Article 26 applies.

The media release confirms the roles played by each party, i.e. banks, debt advisor or legal counsel.

A copy of the Media Release is enclosed for reference.

• The amount of the fees paid to each of the above.

The level of fees payable in relation to the RCF are included within the bundle of confidential documents known as the “Finance Documents”, the contents of which are covered by Article 26

The fees payable to the debt adviser are covered by their terms of engagement which includes confidentiality clauses over which Article 26 applies.

The fees payable to legal counsel are covered by their individual terms of engagement which includes confidentiality clauses over which Article 26 applies.

The panel also considered that, notwithstanding the confidentiality requirement, to provide a breakdown of fees paid to individual companies would be prejudicial to the commercial interests of either the third parties, or the States of Jersey. The panel therefore considered the application of Article 33 (Commercial Interests) of the Freedom of Information (Jersey) Law 2011 to be engaged. Further detail in relation to the application of Article 33 is provided within the Appendix.

• A note of any other fees that will be due to be paid under the facility during the two year initial period to include: 

• The estimated total amount of fees payable;

The level of fees payable in relation to the RCF during the two year term are included within the bundle of confidential documents known as the “Finance Documents”, the contents of which are covered by Article 26.

There is no anticipation that any other fees will be incurred other than those applicable directly to the Revolving Credit Facility.

With respect to the Accounts, these costs will be spread over the life of the facility but will not be directly identifiable as costs associated with the RCF. The wording for the Accounts has not been finalised but it will just summarise the total facility amount agreed (£500m), the date it was agreed on (7 May), the banks involved (as per media release) and the amount drawn down as at the 31st December 2020. All of this information, except the amount drawn at 31/12, is already in the public domain.

• Please provide details of any other costs / charges / interest not included above, that arise directly or indirectly from any draw-down.

• Please provide details of any other costs / charges / interest not included above, that arise directly or indirectly from entering into the RCF.

The funding rates and applicable margin (cost of funds) in relation to the RCF are included within the bundle of confidential documents known as the “Finance Documents”, the contents of which are covered by Article 26.

The future costs of funding will only be known as each individual loan is drawn from the RCF.

There are no other expected costs other than those applicable directly to the Revolving Credit Facility

• Should the RCF be required for a period of greater than the initial two year period what fees have been agreed in order to extend the facility?

The level of fees payable in relation to the RCF during the two-year term and any extension of the facility beyond the initial two years are included within the bundle of confidential documents known as the “Finance Documents”, the contents of which are covered by Article 26.

The confidentiality clauses are contained within the bundle of confidential documents known as the “Finance Documents”, the contents of which are covered by Article 26.

• Should sums still be outstanding at the end of the initial two year period what rates of interest / charges have been agreed in order to extend the facility?

The above looks beyond the facility so would be surprised if this is solely covered within the Agreement – would it be possible to have sight of the relevant confidentially clauses upon which you are placing reliance.

The level of fees payable in relation to the RCF during the two year term and any extension of the facility beyond the initial two years are included within the bundle of confidential documents known as the “Finance Documents”, the contents of which are covered by Article 26.

The confidentiality clauses are contained within the bundle of confidential documents known as the “Finance Documents”, the contents of which are covered by Article 26.

The panel agreed that the terms of the Confidentiality Agreements were significant and binding that Article 26 had been correctly applied. They also noted that Article 34 (The Economy) was engaged in relation to the questions asked.

Appendix

Additional exemptions applied

Article 34 The economy

Information is qualified exempt information if its disclosure would, or would be likely to, prejudice –

(a) the economic interests of Jersey; or

(b) the financial interests of the States of Jersey.

Commentary

Article 34 (The Economy) is a qualified exemption which requires there to be a likelihood of prejudice against the economic interests of Jersey or the financial interests of the States of Jersey. Whilst this could include reputational concerns, the larger concern is whether the economic interests of the States of Jersey could be prejudiced by the release of information – in this instance confidential information, that could undermine Jersey’s reputation.

The following extract from the guidance of the UK Information Commissioner should also be noted:

The exemption concerns the effect on the economy rather than the government’s ability to manage the economy. However, since it is an aim of governments to improve economic prosperity, weakening the government’s control over the economy may also damage the economy itself.

Public interest would not be served by disclosing information which may have a detrimental impact on the economy

Article 33 Commercial interests

Information is qualified exempt information if –

(a) it constitutes a trade secret; or

(b) its disclosure would, or would be likely to, prejudice the commercial interests of a person (including the scheduled public authority holding the information).

Commentary

The following considerations were taken into account by the panel:

Public interest considerations favouring disclosure

• disclosure of the information would support transparency and promote accountability to the general public

Public interest considerations favouring withholding the information.

• the release of the sensitive commercial information of the facility could significantly disadvantage the States of Jersey’s ability to retain commercial advantage in any such future process leading to the inability to secure best value for the tax payer; this will likely prejudice the States of Jersey finances as its bargaining power decreases;

• fees paid are the result of negotiations and therefore commercially sensitive to release;

• impact of a breach of confidentiality, leading to a negative commercial outcome for the facility.