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The Policy & Resources Committee has finalised an agreement with a consortium of five local banks who are providing a revolving credit facility of up to £225m for an initial period of up to two years.
This follows the States decision to borrow up to £250m to meet short-term cash requirements as a result of the implications of the Covid-19 pandemic, which is having a major impact on Guernsey’s public finances.
The States has paid out millions through the payroll co-funding scheme and hardship fund, while tax take is down with many workers on reduced pay or reduced hours.
To provide liquidity throughout this period, the Policy & Resources Committee has secured a revolving credit facility which is provided jointly by Barclays Bank PLC; Butterfield Bank (Guernsey) Limited; HSBC Bank PLC, Guernsey Branch; Lloyds Bank International; and The Royal Bank of Scotland International Limited.
Pictured: Lloyds is one of the five local banks which are providing the credit facility to the States.
P&R Vice-President Lyndon Trott, who is leading on the States of Guernsey’s financial support measures, said: “I’m very pleased that we’ve been able to secure this facility so quickly, and my thanks go to the five banks who are working with us to ensure that we have the liquidity we need to fund these essential measures which are supporting our community through this crisis. They’ve recognised the urgency and importance of what we’re doing in the spirit of Guernsey Together.”
While the States agreed short-term borrowing of up to £250m, the Policy & Resources Committee has continued to review the ongoing crisis' likely implications for public finances and is reportedly "confident" that £225m will be enough to provide businesses with much-needed short-term support whilst still allowing sufficient "headroom".
A revolving credit facility is used where the amount of funding required will fluctuate over the period. There is a maximum amount under the facility which the banks have committed to make available on demand. Interest is paid on the amount drawn-down and a considerably smaller non- utilisation fee is paid on the amount not drawn-down.
Pictured top: Deputy Lyndon Trott.
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