Revolving Credit Facility: Drawdown cap

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A decision made on 21 May 2021

Decision Reference: MD-TR-2021-0062
Decision Summary Title:	Drawdown from the Revolving Credit Facility		Date of Decision Summary:	20th May 2021
Decision Summary Author:	Manager - 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:	Drawdown from the Revolving Credit Facility		Date of Written Report:	20th May 2021
Written Report Author:	Manager - Treasury and Investment Management		Written Report: Public or Exempt?	Exempt (Article 34 – Economic and Financial interests of the States)
Subject: Draw down from the Revolving Credit Facility.
Decision(s): The Minister approved a drawdown cap from the Revolving Credit Facility of £130 million to meet the cashflow and liquidity requirements of the Government of Jersey as they fall due for the period to 30th June 2021 and authorised the Treasurer of the States to complete monthly utilisation requests for May and June 2021 as required up to a total maximum of £130 million.
Reason(s) for Decision: In signing, MD-TR-2020-0051, dated 7th May 2020, the Minister agreed to enter a £500 million Revolving Credit Facility (“RCF”) on behalf of the States of Jersey to provide short-term liquidity. Agreement to withdraw funds from the RCF was approved in the States Assembly 130/2020 (Government Plan 2021-24) which approved a maximum borrowing limit of £385.953 million (inclusive of the approval for a Fiscal Stimulus Fund). By utilising the RCF, the Minister ensures that liabilities can be met as they are forecast to fall due until the end of June. It allows sufficient time to plan and implement a medium-term debt strategy as outlined in Government Plan 2021-24.
Resource Implications: The drawdown cap of £130 million from the RCF will incur interest costs at LIBOR (London Interbank Offer Rate) plus the approved margin. Net increases in finance costs are included within the Government Plan 2021-24 Annex. The Consolidated Fund balance will increase by a maximum of £130 million. The investment return on this amount is deemed to be negligible over the short period of time. The completion of the utilisation request to the agent bank and the management of the transfers form part of the day-to-day activities of the Treasury and Exchequer.
Action required: The Head of Financial Governance to notify the Director of Treasury and Investment Management when the decision has been signed. The Treasurer will sign the utilisation request, counter signed by the Director of Treasury and Investment Management, who will submit to the agent bank to complete the request.
Signature:		Position: Deputy S J Pinel, Minister for Treasury and Resources
Date Signed:		Date of Decision: