Jersey Society for the Prevention of Cruelty to Animals: Extension of existing loan

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A decision made on 24 June 2020

Decision Reference: MD-TR-2020-0079
Decision Summary Title:	JSPCA – extension of existing loan		Date of Decision Summary:	25th June 2020
Decision Summary Author:	Director of Treasury & Investment Management		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Jersey Society for the Prevention of Cruelty to Animals – Extension of a Secured Loan		Date of Written Report:	25th June 2020
Written Report Author:	Director of Treasury & Investment Management		Written Report : Public or Exempt?	Exempt - Article 33(b)
Subject: To request that the Minister for Treasury and Resources extends an existing interest-bearing secured loan in the reduced sum of £250,000 to the Jersey Society for the Prevention of Cruelty to Animals (“JSPCA”) repayable no later than 30th June 2021.
Decision(s): The Minister decided to approve the extension of the existing secured loan to the JSPCA. The Minister further decided to authorise the Treasurer of the States to sign an updated bond in accordance with the terms agreed in this Ministerial Decision.
Reason(s) for Decision: The Coronavirus pandemic is having a significant social and financial impact on the lives of Islanders and businesses as well as presenting a significant level of challenge for Jersey’s charitable organisations. During this unprecedented period of uncertainty for the Island it is appropriate that the Minister for Treasury and Resources sympathetically considers requests for deferrals of loan repayments where this a sound rationale. In signing MD-TR-2020-0029 the Minister has 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 is 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”). Consequently the Public Finances Law applies with those modifications. Under the modifications the limit on loans that the Minister may make in a financial year is increased from £3 million to £100 million, and the limit on total outstanding loans made by the Minister is increased from £20 million to £100 million. In the case of this proposal the level of loans outstanding will actually reduce by £250,000 but the remaining £250,000 loan will now be due over the period of a further 12 months. A thorough and robust assessment of the JSPCA’s ability to repay the extended loan under the terms proposed has been carried out and the Minister is satisfied that repayment will be made within the conditions of the loan terms.
Resource Implications: To date, the resources of the States Treasury and Exchequer have been utilised in managing the current loan. The provision of the loan extension requires no significant additional manpower to implement and the provision and monitoring of loans forms part of the day-to-day activity of the Treasury & Investment Management team. The new bond will be a replication of the existing documentation and the Law Officers’ Department is already engaged to complete this process. The capital repayment of £250,000 will be paid into the Consolidated Fund as will future interest payments. The rate of interest is significantly in excess of the current investment return on the cash held.
Action required: The Head of Financial Governance to advise the Director of Treasury & Investment Management when the decision has been signed. The Director of Treasury & Investment Management to request the Law Officers’ Department to prepare the relevant bond documentation for completion by both parties.
Signature:		Position: Position: Deputy S J Pinel, Minister for Treasury and Resources
Date Signed:		Date of Decision: