Public Finance (Borrowing Powers)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)

2008-13

PUBLIC FINANCE (BORROWING POWERS) ACT 2008

Principal Act

Act. No. 2008-13 Commencement (LN. 2008/054) 24.7.2008

Assent 23.7.2008

Amending

enactments

Relevant current

provisions

Commencement

date

Act. 2009-14 ss. 2, 3(1), (1)(i), (2)(v) & (4), 11, 12 26.3.2009

2016-06 ss. 2, 3(1)(i) 10.3.2016

English sources:

None cited

EU Legislation/International Agreements involved:

Public Finance (Borrowing Powers)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)

2008-13

ARRANGEMENT OF SECTIONS

Section.

1. Title and commencement.

2. Interpretation.

3. Power to borrow.

4. Amount of debentures.

5. Registration of debentures.

6. Transfers of debentures.

7. Interest on debentures.

8. Payment of interest on debentures.

9. Redemption of debentures.

10. Cancellation of debentures.

11. Loan agreements and interest rate swap agreements.

12. Loan agreements and interest rate swap agreements to be tabled.

13. Application of money borrowed.

14. Sinking funds.

15. Securities.

16. Validity of agreements and securities.

17. Interest and repayments to be charged on Consolidated Fund.

18. Regulations.

19. Saving.

20. Repeal.

Public Finance (Borrowing Powers)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)

2008-13

AN ACT TO PROVIDE FOR THE RAISING OF LOANS BY THE

GOVERNMENT OF GIBRALTAR FOR VARIOUS PURPOSES AND

FOR MATTERS RELATING THERETO.

Title and commencement.

1.(1) This Act may be cited as the Public Finance (Borrowing Powers) Act

2008.

(2) This Act comes into operation on the day appointed by the

Government and different days may be appointed for different provisions

and for different purposes.

Interpretation.

2. In this Act, except in so far as the context otherwise requires–

“Minister” means the Minister with responsibility for Public Finance;

“Public Debt” means the principal sum of any debt arising from any

borrowing of money by the Government the repayment of which

the Government or the revenues of Gibraltar or the Consolidated

Fund are liable under any law or under any agreement regulating or

relating to such borrowing;

“Cash Reserves” means the total amount of cash held by the Government

in the Consolidated Fund and the Improvement and Development

Fund;

“Aggregate Public Debt” means the total amount of Public Debt owing

by the Government less any amount held in any sinking fund

established by the Financial Secretary to provide for the repayment

of such Public Debt;

“Net Public Debt” means the Aggregate Public Debt less the Cash

Reserves;

“Gross Domestic Product” means the latest annual figure of Gibraltar’s

Gross Domestic Product published by the Statistics Office of the

Government of Gibraltar;

“Consolidated Fund Recurrent Annual Revenue” means the annual

Recurrent Revenue of the Consolidated Fund for the financial year

ended on 31st March last;

“Annual Debt Service Ratio” means the ratio of debt interest payments,

over a full period of twelve months at interest rates applicable to

Public Finance (Borrowing Powers)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)

2008-13

Public Debt at that time, to the Consolidated Fund Recurrent

Annual Revenue.

Power to borrow.

3.(1) Subject to the provisions of this Act, the Government may, with the

prior approval of the Minister, from time to time, in addition to any other

sums of money that it is for the time being authorised to borrow under any

law, borrow any sum or sums of money provided that the Government shall

not draw down or incur any additional Public Debt nor without the leave of

the House by Resolution draw on the Cash Reserves in manner that will

cause–

(i) the Net Public Debt after such borrowing or drawing to exceed

the higher of £300,000,000 or forty per cent of Gibraltar’s

Gross Domestic Product; or

(ii) the Annual Debt Service Ratio to exceed 8%

(2) For the purposes of any person (including but without prejudice to the

generality of the foregoing the lender of any Public Debt), a Certificate of

the Financial Secretary shall be conclusive as to the level or extent at any

time, or in respect of any specific period of time, of any of the following–

(i) Aggregate Public Debt

(ii) Gross Domestic Product;

(iii) Consolidated Fund Recurrent Annual Revenue;

(iv) Annual Debt Service Ratio;

(v) Net Public Debt.

(3) Any sum of money to be borrowed by the Government under this Act

may be borrowed in any one or more of the following ways, namely–

(a) by the issue of registered debentures on subscription by the

public or by any section of the public, or person; or

(b) from any one or more other persons, on such terms as may be

agreed between the Government and that person or persons.

(4) For the purpose of managing debt interest payments, the Government

may from time to time, with the prior approval of the Minister, enter into

interest rate swap agreements provided that the total notional principal sum

under such swap agreements does not exceed the Aggregate Public Debt.

Public Finance (Borrowing Powers)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)

2008-13

Amount of debentures.

4. Every debenture issued under this Act shall be a sum of £100 or any

multiple thereof.

Registration of debentures.

5.(1) The Financial Secretary shall cause every debenture issued under this

Act to be registered in a register to be kept for that purpose.

(2) The Financial Secretary shall cause a certificate of registration, in the

prescribed form (if any) to be issued to the registered owner of every

debenture issued under this Act.

Transfers of debentures.

6.(1) Every debenture issued under this Act shall be transferable by entry in

the register.

(2) Every transfer shall be made in such manner and subject to such

conditions, if any, as may be prescribed.

Interest on debentures.

7. All money that is raised on the issue of a debenture under this Act shall

bear interest at such rate as may be specified in the prospectus inviting

subscriptions for that debenture or otherwise specified in the instrument

creating that debenture.

Payment of interest on debentures.

8. The interest on the principal money represented by each debenture issued

under this Act shall run from the day named for the purpose in the debenture

and shall be paid half-yearly, at the office of the Financial Secretary, on such

dates as may be specified in the prospectus inviting subscriptions for that

debenture or in respect of such other periods and on such other dates as may

by specified in the instruments creating that debenture.

Redemption of debentures.

9.(1) Every debenture issued under this Act shall be redeemable at par on

such date as may be specified in the prospectus inviting subscriptions for

that debenture or on such date or dates as may be specified in the instrument

creating the debenture.

Public Finance (Borrowing Powers)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)

2008-13

(2) From and after the date of redemption of any debenture issued under

this Act all interest on the principal moneys represented by the debenture

shall cease and determine, whether payment of the principal moneys shall

have been demanded or not.

(3) Notwithstanding subsection (1), the Government may, at its option,

redeem at par any debenture issued under this Act at any time before the

date of redemption on giving not less than six months' notice of its intention

so to do.

(4) Notwithstanding subsection (3) the Government may, in respect of a

specific debenture or specific debentures exclude its right under that

subsection.

(5) The Government may at any time–

(a) redeem any debenture issued under this Act by purchase in the

market; and

(b) transfer any such debenture to any other person, at a price not

less than that for which it purchased it and any debenture so

transferred by the Government shall be subject to all the

provisions of this Act relating to debentures.

Cancellation of debentures.

10. On–

(a) the repayment of the principal moneys represented by a

debenture issued under this Act; or

(b) the redemption of a debenture issued under this Act the

debenture shall be delivered to the Financial Secretary who

shall cancel and retain it for a period of five years.

Loan agreements and interest rate swap agreements.

11. Every agreement referred to in sections 3(3)(b) and 3(4) shall be made

in writing, in the name of the Government, and shall be signed on behalf of

the Government by the Financial Secretary or by any person authorised in

writing by the Minister for the purpose.

Loan agreements and interest rate swap agreements to be tabled.

12. Every agreement specified in section 11 shall be laid on the table of the

Parliament at the next meeting of the Parliament commencing after the date

on which the agreement is made.

Public Finance (Borrowing Powers)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)

2008-13

Application of money borrowed.

13. All sums of money borrowed by the Government under this Act shall be

applied and appropriated at the discretion of the Minister without further

authority than this section, to–

(a) the Consolidated Fund; or

(b) the Improvement and Development Fund for development

purposes; or

(c) the repayment of any other Public Debt.

Sinking funds.

14.(1) The Financial Secretary may establish one or more sinking funds to

provide for the repayment of any money borrowed under this Act, and for

the payment of all interest and other charges payable on money so borrowed.

(2) Every fund so established shall be a special fund within the meaning of

section 18 of the Public Finance (Control and Audit) Act.

(3) The Financial Secretary may from time to time transfer from the

Consolidated Fund into any sinking fund established under this section, such

amounts as he may think fit.

Securities.

15.(1) The Government may issue, in addition to debentures, any bonds,

stock, promissory notes or other securities for the repayment of any money

borrowed under this Act, on such terms and conditions (not being

inconsistent with the terms on which the money has been borrowed) as it

may determine.

(2) Any security issued under subsection (1) shall be issued in writing in

the name of the Government of Gibraltar and shall be signed on behalf of

the Government by the Financial Secretary or by any person authorised in

writing by the Minister for the purpose.

(3) All debentures and other securities issued under this Act, and all

instruments of transfer or sale relating to such debentures and other

securities, shall be exempt from stamp duty.

Validity of agreements and securities.

Public Finance (Borrowing Powers)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)

2008-13

16.(1) Notwithstanding anything contained in any other law, every

agreement specified in section 11, and every debenture and other security

issued under this Act, shall be valid and enforceable and shall have full

force and effect according to their tenor.

(2) The provisions of this Act shall not affect or prejudice the

recoverability by the lender of any moneys borrowed by the Government,

nor the ability of the Government to pay interest thereon.

Interest and repayments to be charged on Consolidated Fund.

17. All money borrowed under this Act, and all interest and other charges

payable on money so borrowed pursuant to every debenture and to every

agreement specified in section 11, and all money, interest and other charges

payable under any other security issued under this Act, shall be charged

upon and shall be payable out of the Consolidated Fund, without further

appropriation than under this section.

Regulations.

18.(1) The Minister responsible for finance may from time to time make

regulations for all or any of the following purposes–

(a) prescribing the form of debentures and other securities issued

by the Government under this Act, and the manner in which

they shall be issued;

(b) providing for registers of securities issued under this Act and

for the transfer of such securities;

(c) providing for the exemption wholly or partly of any debenture,

agreement or security made or issued under this Act or of any

income derived by any person under any such debenture,

agreement or security, from any tax, duty, charge or fee payable

by law in respect of any such debenture, agreement, security or

income;

(d) for such other matters as are reasonably necessary for or

incidental to the due administration of this Act.

(2) Regulations made under this Act may make different provision for

different classes of security.

Saving.

19. Nothing in this Act shall be construed as derogating from any other

lawful power of the Government to borrow money or to issue securities.

Public Finance (Borrowing Powers)

© Government of Gibraltar (www.gibraltarlaws.gov.gi)

2008-13

Repeal.

20. The Borrowing Powers Act, 1988 is repealed.