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Investment In Jersey Seen As A Safe Bet

by Jason Gorringe, Tax-News.com, London

16 June 2014


Jersey's recent GBP250m (USD339.28m) bond issue was more than two and a half times oversubscribed, which the territory's Treasury Minister said is as a result of "Jersey's prudent approach towards the management of public finances."

The States of Jersey secured a low fixed interest rate of 3.75 percent per year over the bond's 40-year life. The proceeds of the bond will go into a ring-fenced fund, which will be lent to affordable housing providers in the island.

Treasury and Resources Minister, Philip Ozouf, said "Jersey's prudent approach towards the management of public finances has been rewarded with a very favorable spread over the 40 year Gilt rate."

Ahead of the sale, a team from Jersey met prospective investors over the course of a four-day roadshow in Jersey, London, and Edinburgh. He said: "The long-standing partnership between Jersey and the United Kingdom has been a key factor in this successful issuance. We look forward to continuing to build stronger relationships with both the City of London and the wider financial community."

Geoff Cook, CEO, Jersey Finance Limited, said: "Given that the coupon rate of 3.75 percent compares favorably 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."

TAGS: Finance | tax | investment | interest | international financial centres (IFC) | Jersey | United Kingdom | offshore | inflation

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