Vote of confidence in Jersey

Friday 13 June 2014

Jersey Finance has described the States of Jersey £250 million debt as a positive endorsement from the investment markets

The issue was two-and-a-half times over-subscribed, which Jersey Finances says is not only a strong outcome, but is also a vote of confidence from markets.

Geoff Cook, CEO, Jersey Finance Limited, said: "Given that the coupon rate of 3.75% compares favourably with other larger and more regular bond issues, and the considerable interest that has been shown from investors, the bond issue is a significant vote of confidence from the market in the long term future of the jurisdiction and its finance industry, the main source of Government revenues.

"Of course with the inflation outlook subdued, and the continuing prospect of historic low interest rates, demand for quality bond issues is high. That said, getting a bond issue away at near big league sovereign rates is a fantastic achievement for a small jurisdiction, and testament to the underlying strength of public finances, and the strong fiscal and net asset position of Jersey as a jurisdiction."

The pricing represents one of the lowest new issue spreads ever achieved for a long dated, non UK guaranteed sterling transaction.

"Its evident that investors were willing to lend on a long-term basis based on the strength of Jersey’s financial management and ability to repay. They were impressed by Jersey’s ability to manage difficult global economic circumstances and by the financial reserves the Island has built up.  Factors such as Jersey having no annual fiscal deficit and no short term debt, and an ability to run balanced budgets will have also been taken into account in the popularity of the issuance," said Mr Cook.

He added that the success of the issue was a unique achievement for a jurisdiction the size of Jersey and had reinforced many of the strengths of the Island that also play a part in attracting financial services business including its enduring economic and political stability, sound public finances and the quality and robustness of its regulatory regime.