Government of Jersey debt insurance programme: Approval of the appointment of a panel of bookrunner banks and legal advisors

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A decision made on 10 December 2021

Decision Reference: MD-TR-2021-0137
Decision Summary Title:	Approval of the appointment of a panel of bookrunner banks and legal advisors for the GOJ debt issuance programme.		Date of Decision Summary:	3rd December 2021
Decision Summary Author:	Head 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:	Approval of the appointment of a panel of bookrunner banks and legal advisors for the GOJ debt issuance programme.		Date of Written Report:	3rd December 2021
Written Report Author:	Head of Treasury and Investment Management		Written Report: Public or Exempt?	Exempt (Article 33)
Subject: To approve the appointment of the legal advisor and a panel of bookrunner banks for the Government of Jersey (GoJ) debt issuance programme.
Decision(s): The Minister agreed to appoint the following Banks to the panel of managers for the GoJ debt issuance programme: Barclays, HSBC Bank plc, Lloyds, Goldman Sachs, Royal Bank of Canada and Santander. The Minister authorised the Treasurer of the States, under advice from the debt advisor, to select banks from the panel and allocate the role they will fulfil for each respective issuance under the GoJ debt issuance programme. The Minister also agreed to appoint the following legal advisor for the GoJ debt issuance programme: Allen & Overy.
Reason for Decision: A procurement process to select the legal advisor and a panel of bookrunner banks for the GoJ debt issuance programme was prepared and countersigned by both the Treasurer of the States and Commercial Services to ensure the selection process was in full compliance with GoJ requirements. The tenders for the two roles were undertaken in parallel. Advertising of the role was conducted via the States website. In addition, notifications were provided by Treasury to entities recommended by our debt advisor as providing particularly high levels of service. Tendering documents were issued via the States procurement portal and 8 legal tenders and 10 bookrunner tenders were received in response. The tender responses were reviewed against a pre-prepared pre-qualification scoring matrix to identify whether applicants were able to meet required standards. All 18 applications across both roles were deemed able to provide the required service. A qualitative review was then conducted against a pre-prepared scoring matrix to determine the “Most Economically Advantageous Tenders”. The scoring matrix for the tender review considered a wide range of appropriate criteria including: Demonstration of understanding of the complexities of the brief; Evidence of extensive experience in the Debt Capital Markets with organisations of a similar complexity; Demonstrated expertise in the preparation and issuance of debt incorporating ESG measures (or legal advice relating to this); Calibre of the representatives intended to carry out the work including CVs; Demonstration of ability to comply with the deadlines set for the completion of the work; Answers to tender response questions; Advantages deemed to benefit the Island economy; Range of services provided; Financial proposal including follow on work; Evidence of Internal quality assurance processes. At this stage 2 tenderers were eliminated from the Bookrunner tender and 4 tenderers were eliminated from the legal advisor tender. The remaining 8 banks were invited to interview for the bookrunner role, and the remaining 4 legal firms were invited to interview for the legal counsel role. The interviews consisted of a 25 minute presentation of the key areas of their response followed by 25 minutes of questions and answers. Bookrunner interviews were conducted in London over 2 days. Legal advisor interviews were also conducted over 2 days remotely. Performance at interview was scored based on a scoring matrix and combined with the results of the initial tender review, the combination of the results determined the most economically advantageous tenders to be recommended for appointment to the Minister. For the legal tender, 3 tenderers were eliminated following interview, leaving Allen & Overy as the highest scoring and Most Economically Advantageous Tender. From the Bookrunner tender 2 tenderers were eliminated following interview, leaving Barclays, HSBC Bank plc, Lloyds, Goldman Sachs, Royal Bank of Canada and Santander as the highest scoring and Most Economically Advantageous Tenders. These 6 selected banks are to be appointed to a panel of managers, from which it is proposed that the Treasurer of the States, under advice from the debt advisor, will select the banks for each respective issuance and their relative role allocation.
Resource Implications: The costs of the debt issuance, including debt financing costs, issuance costs, debt repayments, management and administration costs will be met from the Strategic Reserve Fund in line with the approval provided within P.80/2021. Bookrunner and legal costs are included in issuance costs outlined in section 10.31-10.33 of P.80/2021. These costs will be dependent on the optimum issuance timetable which will include the number of debt tranches and type of debt issued, and will be determined by market conditions. In line with the approved proposition, these costs are not expected to exceed £4m.
Action required: The Head of Financial Governance to advise the Director of Treasury and Investment Management when the decision has been signed. The Treasury and Investment Management Team will ensure appointments are implemented.
Signature:		Position: Deputy S J Pinel, Minister for Treasury and Resources
Date Signed:		Date of Decision: