Meeting with Chief Minister confirms new £ 164.7 million financing Scheme

The Leader of the GSD, Keith Azopardi and MPs Elliott Philips, Daniel Feetham and Roy Clinton met today with the Chief Minister and his advisers to be briefed on the new 50:50 borrowing scheme.GSD Leader Keith Azopardi said:

“The offer of a briefing made by the Chief Minister during the Budget debate as to this new borrowing was provided to the official Opposition today. The meeting offered the GSD an opportunity to hear details of the scheme put together and ask questions. We have reflected carefully on everything that was said.

What we have heard today from the Chief Minister and his legal advisers are details in respect of a very clever piece of financial engineering. However the substance of the transaction as opposed to its legal form is that £164.7 million has been issued in Loan Notes in March 2019 that will indirectly be repaid over a period of 15 years at a fixed rate of 3.29%.
Of this amount £88.5 million was used to purchase the Government’s interest in the six affordable housing schemes namely Beach View Terraces, Mons Calpe Mews, Waterport Terraces, Cumberland Terraces, Nelson’s View and Bayview Terraces and £67.25 million has been earmarked for the initial development costs of Hassan Centenary Terraces. A balance of approximately £9 Million is earmarked for administration and transactional costs as well as the first year’s interest repayment.

The repayment of capital and interest is anticipated to be funded from future sales of property of the six named housing estates as well as Hassans Centenary Terraces that has also been parked within the same ownership structure.

Coupled with the previous mortgage of our housing estates for £300 million, this Government cannot continue to pretend that it is not borrowing heavily to fund its capital projects.”