Response to comments made in respect of a recent Ministerial Decision.
Jersey Development Company (JDC) wishes to respond to comments made in respect of a recent Ministerial Decision to extend the repayment date on a £2.5m credit facility to August 2020.
The £2.5m loan was originally raised and spent on the College Gardens development and not the IFC. At the time of putting in place this loan, it was intended to have a different debt structure that only required the loan for a shorter period. The construction cost of College Gardens is £33m (net of the Jersey Homes Trust properties) and this is supported by a construction loan of £17m and a Revolving Credit Facility of £2.5m. JDC has been able to limit its borrowings on College Gardens due to the phasing of the development (allowing the income of completed sales to replenish the debt).
All of JDC's developments are debt funded. Due to JDC's strict risk mitigation measures contained in its operating model, the level of debt on each project is always fully covered by the end value of the completed asset thereby eliminating any risk of exposure.
Whilst the facility is to be repaid on the sale of IFC 1 this is only so that the loan is repaid in the shortest timescale. IFC 1 is likely to be sold in advance of the final units in College Gardens, which will not be completed until April 2019.