07 April 2020
Crown Dependencies establish important COVID-19 loan guarantee schemes
The Governments of Guernsey, Isle of Man and Jersey have each agreed to provide loan guarantee schemes to enable further financial support for businesses in the Crown Dependencies in light of the coronavirus (COVID-19) pandemic.
A coordinated approach has been taken in agreeing the schemes between the Governments of the Crown Dependencies and, as such, the schemes will be broadly aligned, although each Government will guarantee loans only for its own local businesses. The schemes will be operated initially by a number of banks across Guernsey, Jersey and the Isle of Man, including Barclays, HSBC, Lloyds, RBSI/NatWest/Isle of Man Bank, Santander and Conister.
Guarantees will be provided to the participating banks of 80% of lending, providing in aggregate £140 million of new lending across the Crown Dependencies. The schemes are designed to provide increased access to liquidity for viable businesses that may suffer solvency issues as a result of the COVID-19 pandemic.
The Carey Olsen teams advised the States of Guernsey, the Government of Jersey and the Isle of Man Government, with the assistance of their Attorney General's Chambers, on the establishment of the schemes including agreeing the heads of terms, drafting the scheme documentation and its launch.
Jersey partner Robin Smith led the pan-jurisdictional team, assisted by senior associate Stephen Gie and associate Holly Brown in Jersey. The Guernsey corporate team was led by partner Andrew Boyce, assisted by senior associate Vaishali Gupta and associate Rachel de la Haye. Carey Olsen provided the advice at concessionary rates. Appleby provided advice to the banks throughout.
Robin said: "We have seen that a key strategy for many governments around the world is to relieve the liquidity pressures on individuals and businesses whilst social distancing measures are temporarily in place so we were very pleased to assist the Governments of the Crown Dependencies in the set-up and launch of their loan guarantee schemes. It is important for local business and industry groups to support our local governments and we are happy to have played our part."