Minister: Govt Arranges $200 Million Loan Facility

July 17, 2015

[Updated] The Bermuda Government will be executing a $200 million loan facility agreement with the Bank of NT Butterfield, Minister of Finance Bob Richards in the House of Assembly today [July 17], saying that when this facility is fully drawn Bermuda’s gross debt will stand at $2.385 billion.

Minister Richards said, “Members will recall that in the 2015/16 Budget Statement, Government advised that the $800 million borrowed in 2013 to finance multiple years of deficits was running out.

“That was because, in addition to financing the deficits for 2013/14, 2014/15 and part of the 2015/16 deficit, we also had to pay off bonds that matured during the period and other short term debt that the Government had incurred as at March 31, 2014. It was noted that we anticipate further government borrowing in 2015.

“The borrowing requirement in 2015–2016 is estimated at $125.0 million, which is equal to the estimated deficit of $220.0 million less funds in the Sinking Fund and cash balances on hand at the end of the last fiscal year.

“Since the beginning of the fiscal year [April 2015] Government has been considering various financing strategies to meet its financing needs for the current fiscal year.

“Following a RFP process and careful consideration of all of these options, I can advise Honourable Members that the Bermuda Government will be executing a US$200,000,000 2 year term loan facility agreement with the Bank of NT Butterfield & Son Limited.”

“It must be noted that at this time Government has not borrowed $200 million but only has a facility in place to borrow up to this amount. Funds will only be drawn when absolutely necessary.

“It is anticipated that this transaction should meet Government’s total financing requirements for fiscal year 2015/16 and a portion of the 2016/17 deficit.

“The loan matures in 2017 and Government has the option to either refinance this debt, or it can be paid off using the Sinking Fund. The decision taken will be dependent on prevailing market conditions at the time and the balance in the Sinking Fund.

“The raising of this US$200 million loan facility has helped the Bermuda Government to enhance its financing flexibility and keeps this capital here on the island. Moving forward the Government will seek to further expand the domestic capital markets which could provide many benefits to the Bermuda economy.

The Minister added that when this facility is fully drawn gross debt will stand at $2.385 billion, saying “this level of debt for an economy the size of Bermuda is not only unsustainable, but also, as mentioned in the Budget Statement, is the biggest risk to Bermuda’s financial independence and the welfare of all sectors and all people in this island.

“Therefore it is critically important that Government continues to aggressively reduce the deficit and start paying down on our debt.”

The Minister’s full statement follows below:

Mr. Speaker, I rise this morning to advise Honourable Members of the status of Government borrowing and the latest borrowing activities. Mr. Speaker, you would be aware that pursuant to the Government Loans Act 1978, I am required to inform the Legislature as soon as practicable after the execution of an agreement pertaining to the Act.

Honourable Members will recall that in the 2015/16 Budget Statement, Government advised that the $800 million borrowed in 2013 to finance multiple years of deficits was running out. That was because, in addition to financing the deficits for 2013/14, 2014/15 and part of the 2015/16 deficit, we also had to pay off bonds that matured during the period and other short term debt that the Government had incurred as at March 31, 2014. It was noted that we anticipate further government borrowing in 2015.

Mr. Speaker, the borrowing requirement in 2015–2016 is estimated at $125.0 million, which is equal to the estimated deficit of $220.0 million less funds in the Sinking Fund and cash balances on hand at the end of the last fiscal year.

Honourable Members are advised that traditionally, the Government finances its deficits almost entirely with borrowing in the international capital markets; there is only $50 million in Bermuda-dollar bonds. The relative lack of a domestic government bond market and local borrowing implies less financing flexibility than those countries able to borrow largely from their own residents enjoy.

Mr. Speaker, $2.135 billion of the Bermuda Government’s borrowings are in US$ and are in long-term fixed rate instruments. Currently Government’s average cost of borrowing is 5.119%.

As per Government’s Debt Management Policy the types of debt instruments to be used by the Government include:

  • Banking loan/overdraft facilities
  • Revolving credit facilities
  • Private Placements
  • Public Bonds

Considering the Government’s current debt profile and the size of the borrowing requirements, the strategy for 2015/16 is to borrow in Bermuda, on a short-term basis.

Honourable Members are advised that since the beginning of the fiscal year [April 2015] Government has been considering various financing strategies to meet its financing needs for the current fiscal year. Following a RFP process and careful consideration of all of these options, I can advise Honourable Members that the Bermuda Government will be executing a US$200,000,000 2 year term loan facility agreement with the Bank of NT Butterfield & Son Limited, because of the following reasons:

  • Competitive pricing at 4.75% that will lower Government’s weighted average cost of borrowing;
  • Lower costs as a result of the fact that the usual arrangement and other fees that normally are associated with other forms of borrowing such as public bond offerings are lower for this deal. For context it is noted that these fees can typically range from $500,000 to $2,000,000;
  • Minimal documentation requirements resulting in lower legal fees;
  • Market Certainty; there are no market timing issues and pricing uncertainty associated with this transaction. International deals will have this risk which can negatively impact the coupon rate and execution of the deal;
  • Minimal reporting requirements and no restrictive covenants;
  • Flexible drawdown terms so that funds can be drawn as needed, saving on interest cost;
  • The borrowing is being arranged locally.

Honourable Members are advised that this facility offers the Government valuable flexibility with regard to its debt management strategy. Also satisfying is the fact that a local financial institution was able to provide Government with its financing needs for the year demonstrating the strength of the local financial sector.

Mr. Speaker, it must be noted that at this time Government has not borrowed $200 million but only has a facility in place to borrow up to this amount. Funds will only be drawn when absolutely necessary. It is anticipated that this transaction should meet Government’s total financing requirements for fiscal year 2015/16 and a portion of the 2016/17 deficit.

Mr. Speaker, the loan matures in 2017 and Government has the option to either refinance this debt, or it can be paid off using the Sinking Fund. The decision taken will be dependent on prevailing market conditions at the time and the balance in the Sinking Fund.

The raising of this US$200 million loan facility has helped the Bermuda Government to enhance its financing flexibility and keeps this capital here on the island. Moving forward the Government will seek to further expand the domestic capital markets which could provide many benefits to the Bermuda economy.

Mr. Speaker when this facility is fully drawn gross debt will stand at $2.385 billion. This level of debt for an economy the size of Bermuda is not only unsustainable, but also, as mentioned in the Budget Statement, is the biggest risk to Bermuda’s financial independence and the welfare of all sectors and all people in this island. Therefore it is critically important that Government continues to aggressively reduce the deficit and start paying down on our debt.

Thank you Mr. Speaker.

Update 11.48am: Opposition MPs are now questioning Minister Richards on this loan facility, saying that in 2013 when we borrowed $800 million the Minister said it would last three years.

The Opposition asked him does borrowing in 2 years, rather than 3, show his financial mismanagement. The Minister said it does not, saying that they inherited a bad economy.

As of this writing, the MPs continue to discuss this $200 million loan facility.

Update 12.37pm: Audio excerpt of the MPs discussing the loan facility

Second audio excerpt of the MPs discussing the loan facility

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  1. turn of events says:

    So a few years ago the BDA gov bailed out BNTB with 200m , now BNTB bailing out the government for 200…..our debt as a country is spiraling out of control. No one is thinking about how this effects the children….sad times…

    • iabingi says:

      Damned if you do, damned if you don’t

    • inna says:

      Agreed. But is is not spinning out of control for no reason! And every time the current govt tries to slow the spinning down, well, you already know what i am going to say.

    • jt says:

      No one “thought” about how this affects our children. Some still aren’t. Minister Richards has repeatedly stated this is unsustainable both now and prior to the OBA being elected.

    • Rhonda says:

      What happened to the 800 million that was suppose to last 3 budgets cycles……. When you borrowed it you had already looked under hood as well as so called done an emergency borrow prior to that….so please don’t give me PLP fault…on how it was spent……not why you borrowed it…. but exactly how it was spent…..adding to that the funds received from furlough days…

      • jt says:

        When you started with “what happened to the $800 million” I thought for a second you had seen the light.

        • Facts over Political hats!! says:

          This borrowing clearly indicates that the

          OBA has NO “ECONOMIC RECOVERY PLAN” to grow our economy.

          OBA has NO Plan to Diversified our Ecomony.

          The OBA called out that PLP was doing nothing but borrowing. …..but looks like they have put done the PLP.

          Bermuda must explore alternative ways to generate Revenues Sources. This current path will not work.

          As MP Leah Scott the OBA must stop playing the “Blame Game”, accept responsibility for the economy after 3 years as the government and get on with a plan…..

          • jt says:

            You and others must accept the degree to which present borrowing relates to past borrowing.
            Present attempts to grow the economy and to cut expenses have been met with extreme resistance. Don’t call it a lack of a plan merely because you disagree with the path.

            • Kangoocar says:

              Jt, don’t waste your time explaining anything to ” facts over political hats ” that is just another Betty from plp/Alaska hall!!! The avatar gives them away everytime!!!
              Alaska hall/plp needs to stop with their constant nonsense and apologize for the mess they put us in and also stop continuing to get in the way!!! Bermuda is heading into a fiscal mess that will be worst than Greece if we don’t do something now to stop it!!!!

      • Come On ThRead says:

        $800 still unaccounted for under PLP government. Therefore it kinda is their fault.

        • Jus' Askin' says:

          It was accounted for ;-)

          • jt says:

            When and by whom?

            • Jus' Askin' says:

              The Accountant General , but I guess You only listen to the negative ;-)
              This matter was resolved, yet people like You will continue to keep the lie alive :-(

              • Peace to All says:

                This was a rude reply. Please ignore.

              • jt says:

                So the qualified audits were satisfied.

                • Jus' Askin' says:

                  The qualified audits were satisfied and that is how we came to learn of all the cost over runs ;-)

                  The $800 million was ‘Unaccounted For’ , “NOT STOLEN” but once all the data was finally collected, the $800 million was accounted for. ;-)

                  Seems people choose not to want to know :-D

                  • jt says:

                    Link please. As far as I know it remains unaccounted for.
                    If you are correct I will humbly submit, but also point out that your best defence is an admission to gross mismanagement that directly contributed to $800 million of our present debt that is completely unrelated to the world downturn and a huge part of why we continue to borrow.

      • Bermyman says:

        It is mainly the Union with the PLP and the People’s Campaigns fault.

        Government’s biggest expenditure is the Civil Service, and continues to be. Unless there is serious considerations made as per the SAGE then we will continue to go down this road. You can spend a buck to make a buck, that makes sense, but spending to make nothing is what the PLP designed, an unsustainable oversized Civil Service is.

        Bottom line is, Furlough days and further reductions in compensation or redundancies. There is no other way unless we somehow raise our tax revenues expedentially. But the combined opposition lose their brains every time it is proposed.

        The PLP lemmings such as Rhonda, still do not understand how our economy works, as week in, week out they spread Xenophobic hate against PRC’s and guest workers who contribute expedentially to our economy. They simply do not understand that economic contraction has occurred, because there are 5,000 less people living and working in Bermuda than there were pre-banking crisis.

    • Tired of the OBA says:

      If things are not going well why did the OBA just award the BTA bonuses BOB THE DESTROYER?

      • Not exactly says:

        The OBA did not award any of those bonuses. The Government (OBA) gives a grant to the BTA. This grant is smaller than the BDOT budget allocations in year’s past. The BTA Board then decides on how that money is spent. With less money with which to operate, the BTA have been involved in the America’s Cup, cruise ships returning to town and an advertising campaign that seems to be crafted around measured needs and performance expectations for the first time since I can remember. All this with a level of transparency of industry metrics.

        • Rhonda says:

          Don’t forget to add, that the hotel occupancy tax that once went to the government coffers, now goes to the BTA.

      • watchmen says:

        Exactly they are so full of s&*%.

      • Bermyman says:

        Because they are actively working to generate economic activity, and we need good people to do that for us who would otherwise be employed by the more competitive private sector.

        Debt is driven by the large and overcompensated civil service, a PLP legacy that has caused much of the mess we are in today. Every Private sector worker supports the civil service and the health insurance structure, when you reduce the private sector by 5,000 people who were from abroad and spending good money here, then you have a problem. That is what occurred under the end of the PLP’s tenure.

        The matter is, the Unionized PLP supporters are the economic ball and chain, They consume taxpayers funds, tax the health system and refuse to take pay cuts like the rest of the private sector has.

        The whole island is in peril to pander the needs of the selfish few at the Unions.

      • Watching #2 says:

        So the PLP mishandles the budget big time and loses tons of money, wastes tons of money, leaves money not accounted for, and slips plenty off to friends and family, (such as the religious tourism boondoggle). And the OBA is left to borrow money and pay the huge interest payments on the already borrowed piles, and they scream. If they try to cut the bloated civil service, more per capita than anywhere in the world, they scream and yell. They are damned if they do, damned if they don’t. Here’s a thought. Why don’t the PLP pay back all the money they lost and we start even?

  2. TravelingTreeFrog says:

    When are you actually going to employ some of the cost cutting measures recommended by the sage committee? You had these brilliant people come together on their dime to give you advice that is collecting dust on your desks. Civil servants, unions, youth and the general public offered extremely good suggestions but it seems no one on the Hill has the ability to issue some directives!

    We cannot keep digging into this hole. We are eventually going to drown! But I guess I should say congratulations on tying the life saver around the rock…. now we can hang on for dear life till the inevitable next year…

    • Jeremy Deacon says:

      It is too late for that IMO. The time to do that was 18 months ago – not half way through an electoral cycle. I agree re cost cutting tho and fear that OBA has not grasped the nettle and has settled for increased costs/taxes (it is reviewing the taxes remember) and cutting the low hanging fruit rather than getting to grips with what really needs doing in order to cut costs.

      • Chris Famous says:

        And what exactly would be the smart cost cutting measures Mr. Deacon?

  3. San George says:

    Does Senator Georgia Marshall still want to be a Bermudian?

  4. blow in says:

    IS THAT 39750DOLLARS PER BERMUDIAN????

    • watchmen says:

      Yes – as the Former party was so bad at managing debt levels it can only be argued that they do not know how to manage the purse – some in secret (and in the open) posit that blacks/plp cannot manage money – the PLP (for their part) did little to dispel this idea.

      But what of nations whose purse strings have been managed by overwhelmingly white governments for centuries? $39,750 per Bermudian huh? Read em and weep.

      US. $58,437
      UK $160,158
      France $86,317
      AUS. $52,597
      Greece $47,636

      I can go on and on…the common denominator among all of this crushing debtis centrally issued FIAT CURRENCY you fools. The banks are at the core of the problem – always have always will be. If you need a lesson on fractional reserve banking I am willing to give you the 101…

      The countries with the least Debt per ca-pita or “per head” interestingly enough have managed in large part to avoid fiat based systems – but that is changing rapidly. You think the unrest in Ukraine is over Russian occupation? Syria over terrorist/humanitarian concern? Libya over Qaddafi? The list goes on…all land grabs, all sovereign wealth seizure and all eventually converted to centrally issued fiat currency.

      Wake the hell up you idiots…

      • know dat says:

        Word

      • sonso says:

        Cuz calling people idiots will get you far in conversation…

        • Keepin' it Real!...4Real! says:

          But he’s speaking the truth…and I’ve always said the truth is rarely popular…The central banking system OWNS YOU AND YOUR FUTURE….So wake da f#@& up idiot!.

      • TravelingTreeFrog says:

        *instert blank stare emoji*

        Bermuda doesn’t have a central bank. We cannot print more money… nor is that the answer. And as opposed to fiat money you suggest we go back to carrying gold coins and bartering with bushels of wheat?

        I guess I need the fractional reserve banking 101 lesson…

        • Keepin' it Real!...4Real! says:

          Is there an HSBC in Bermuda???

        • Keepin' it Real!...4Real! says:

          Here is a list of…

          ROTHSCHILD OWNED & CONTROLLED BANKS:

          Afghanistan: Bank of Afghanistan
          Albania: Bank of Albania
          Algeria: Bank of Algeria
          Argentina: Central Bank of Argentina
          Armenia: Central Bank of Armenia
          Aruba: Central Bank of Aruba
          Australia: Reserve Bank of Australia
          Austria: Austrian National Bank
          Azerbaijan: Central Bank of Azerbaijan Republic
          Bahamas: Central Bank of The Bahamas
          Bahrain: Central Bank of Bahrain
          Bangladesh: Bangladesh Bank
          Barbados: Central Bank of Barbados
          Belarus: National Bank of the Republic of Belarus
          Belgium: National Bank of Belgium
          Belize: Central Bank of Belize
          Benin: Central Bank of West African States (BCEAO)
          Bermuda: Bermuda Monetary Authority
          Bhutan: Royal Monetary Authority of Bhutan
          Bolivia: Central Bank of Bolivia
          Bosnia: Central Bank of Bosnia and Herzegovina
          Botswana: Bank of Botswana
          Brazil: Central Bank of Brazil
          Bulgaria: Bulgarian National Bank
          Burkina Faso: Central Bank of West African States (BCEAO)
          Burundi: Bank of the Republic of Burundi
          Cambodia: National Bank of Cambodia
          Came Roon: Bank of Central African States
          Canada: Bank of Canada – Banque du Canada
          Cayman Islands: Cayman Islands Monetary Authority
          Central African Republic: Bank of Central African States
          Chad: Bank of Central African States
          Chile: Central Bank of Chile
          China: The People’s Bank of China
          Colombia: Bank of the Republic
          Comoros: Central Bank of Comoros
          Congo: Bank of Central African States
          Costa Rica: Central Bank of Costa Rica
          Côte d’Ivoire: Central Bank of West African States (BCEAO)
          Croatia: Croatian National Bank
          Cuba: Central Bank of Cuba
          Cyprus: Central Bank of Cyprus
          Czech Republic: Czech National Bank
          Denmark: National Bank of Denmark
          Dominican Republic: Central Bank of the Dominican Republic
          East Caribbean area: Eastern Caribbean Central Bank
          Ecuador: Central Bank of Ecuador
          Egypt: Central Bank of Egypt
          El Salvador: Central Reserve Bank of El Salvador
          Equatorial Guinea: Bank of Central African States
          Estonia: Bank of Estonia
          Ethiopia: National Bank of Ethiopia
          European Union: European Central Bank
          Fiji: Reserve Bank of Fiji
          Finland: Bank of Finland
          France: Bank of France
          Gabon: Bank of Central African States
          The Gambia: Central Bank of The Gambia
          Georgia: National Bank of Georgia
          Germany: Deutsche Bundesbank
          Ghana: Bank of Ghana
          Greece: Bank of Greece
          Guatemala: Bank of Guatemala
          Guinea Bissau: Central Bank of West African States (BCEAO)
          Guyana: Bank of Guyana
          Haiti: Central Bank of Haiti
          Honduras: Central Bank of Honduras
          Hong Kong: Hong Kong Monetary Authority
          Hungary: Magyar Nemzeti Bank
          Iceland: Central Bank of Iceland
          India: Reserve Bank of India
          Indonesia: Bank Indonesia
          Iran: The Central Bank of the Islamic Republic of Iran
          Iraq: Central Bank of Iraq
          Ireland: Central Bank and Financial Services Authority of Ireland
          Israel: Bank of Israel
          Italy: Bank of Italy
          Jamaica: Bank of Jamaica
          Japan: Bank of Japan
          Jordan: Central Bank of Jordan
          Kazakhstan: National Bank of Kazakhstan
          Kenya: Central Bank of Kenya
          Korea: Bank of Korea
          Kuwait: Central Bank of Kuwait
          Kyrgyzstan: National Bank of the Kyrgyz Republic
          Latvia: Bank of Latvia
          Lebanon: Central Bank of Lebanon
          Lesotho: Central Bank of Lesotho
          Libya: Central Bank of Libya
          Uruguay: Central Bank of Uruguay
          Lithuania: Bank of Lithuania
          Luxembourg: Central Bank of Luxembourg
          Macao: Monetary Authority of Macao
          Macedonia: National Bank of the Republic of Macedonia
          Madagascar: Central Bank of Madagascar
          Malawi: Reserve Bank of Malawi
          Malaysia: Central Bank of Malaysia
          Mali: Central Bank of West African States (BCEAO)
          Malta: Central Bank of Malta
          Mauritius: Bank of Mauritius
          Mexico: Bank of Mexico
          Moldova: National Bank of Moldova
          Mongolia: Bank of Mongolia
          Montenegro: Central Bank of Montenegro
          Morocco: Bank of Morocco
          Mozambique: Bank of Mozambique
          Namibia: Bank of Namibia
          Nepal: Central Bank of Nepal
          Netherlands: Netherlands Bank
          Netherlands Antilles: Bank of the Netherlands Antilles
          New Zealand: Reserve Bank of New Zealand
          Nicaragua: Central Bank of Nicaragua
          Niger: Central Bank of West African States (BCEAO)
          Nigeria: Central Bank of Nigeria
          Norway: Central Bank of Norway
          Oman: Central Bank of Oman
          Pakistan: State Bank of Pakistan
          Papua New Guinea: Bank of Papua New Guinea
          Paraguay: Central Bank of Paraguay
          Peru: Central Reserve Bank of Peru
          Philip Pines: Bangko Sentral ng Pilipinas
          Poland: National Bank of Poland
          Portugal: Bank of Portugal
          Qatar: Qatar Central Bank
          Romania: National Bank of Romania
          Russia: Central Bank of Russia
          Rwanda: National Bank of Rwanda
          San Marino: Central Bank of the Republic of San Marino
          Samoa: Central Bank of Samoa
          Saudi Arabia: Saudi Arabian Monetary Agency
          Senegal: Central Bank of West African States (BCEAO)
          Serbia: National Bank of Serbia
          Seychelles: Central Bank of Seychelles
          Sierra Leone: Bank of Sierra Leone
          Singapore: Monetary Authority of Singapore
          Slovakia: National Bank of Slovakia
          Slovenia: Bank of Slovenia
          Solomon Islands: Central Bank of Solomon Islands
          South Africa: South African Reserve Bank
          Spain: Bank of Spain
          Sri Lanka: Central Bank of Sri Lanka
          Sudan: Bank of Sudan
          Surinam: Central Bank of Suriname
          Swaziland: The Central Bank of Swaziland
          Sweden: Sveriges Riksbank
          Switzerland: Swiss National Bank
          Tajikistan: National Bank of Tajikistan
          Tanzania: Bank of Tanzania
          Thailand: Bank of Thailand
          Togo: Central Bank of West African States (BCEAO)
          Tonga: National Reserve Bank of Tonga
          Trinidad and Tobago: Central Bank of Trinidad and Tobago
          Tunisia: Central Bank of Tunisia
          Turkey: Central Bank of the Republic of Turkey
          Uganda: Bank of Uganda
          Ukraine: National Bank of Ukraine
          United Arab Emirates: Central Bank of United Arab Emirates
          United Kingdom: Bank of England
          United States: Federal Reserve, Federal Reserve Bank of New York
          Vanuatu: Reserve Bank of Vanuatu
          Venezuela: Central Bank of Venezuela
          Vietnam: The State Bank of Vietnam
          Yemen: Central Bank of Yemen
          Zambia: Bank of Zambia
          Zimbabwe: Reserve Bank of Zimbabwe

  5. Rhonnie aka BlueFamiliar says:

    Soo… basically this is overdraft protection for the Government?

  6. Bonnie Blue says:

    Very scary! I hope and pray we won’t be like Greece at some point in the future. We need to look at government revenues and not spend over that amount period. Put certain projects on hold until we have the money. It’s like me maxing out all my credit cards, requesting limit increases and still spending and spending but not paying my mortgage. At some point I am going to get kicked out of my house and the lights will be turned off. It might be a good idea for us all to keep a little money in a cookie jar because I think there may come a day when you go to the ATM and Butterfield is broke.

    • stunned... says:

      as long as the Bermuda government keeps pandering to all of the unions, government “workers” with their wanting to preserve their no-pay cuts, sick days, vacation days, no-furlough days etc benefits, it will have to keep borrowing until our credit worthiness tanks and we become another Greece and true to form our government “workers” will be out there causing unrest, like babies throwing their toys out of the pram.

      • TonyC says:

        Don’t forget the half day off W&E get soon for a party at Clearwater.

    • Dees says:

      Under the “unpopular” OBA we can limp back to fiscal health. The plp inherited a sound economy and turned it into the mess we have today. If they were to inherit the current economy… well…… hello Greece,Zimbabwe etc. The educated will simply leave (as we have already witnessed)… nothing is easy when you’re broke.

      • watchmen says:

        The truly educated understand why government debt accrues in the first place. It is easy to blame unions, civil service, or the myriad of other reasons listed above. It does carry weight – no doubt. PLP or OBA when you start borrowing from monetary “authorities” you never come out of the debt hole – fact.

        Name me one nation on earth that has fully repaid its debt to private banking “authorities”. please try.

        • Keepin' it Real!...4Real! says:

          Well Greece found out that their debt wasn’t acquired to help the people it was acquired to BAIL OUT THE BANKERS…Their debt was found to be an illegal scheme…so they may get their debt forgiven…but they sure have one hell of a fight on their hands.

          • stunned... says:

            the issue here is the Bermuda government is bailing out the civil service. in effect kicking the can/bill down the road to be footed by another generation. good luck.

            • stunned... says:

              the likely scenario will resemble Greece, wherein the government workers will end up with a government that is fully debt-laden and UNABLE to honour jobs, salaries, pensions, vacation pay, perks and benefits. civil servants, enjoy your benefits now while you can.

  7. Truth says:

    $200m borrow – $70m AC guarantee =

    • Onion says:

      If the AC generates $250 million in economic activity the Bermuda government takes home about 18% of Bermuda GDP so the AC will create ~$45 million in tax. Of that $75 million $25 is sponsorship guarantee, leaving $50 out of pocket, of which $45 million will come back in tax.

      Net cost of the AC will be $5 million when it is all said and done, and that will come back to Bermuda (and then some) with the permanent long-term tourism boost.

  8. watching says:

    There has to be a point where the OBA and Minister Richards must be accountable for the financial decisions they are making. Regardless of what happened under the PLP.
    Is Minister Richards managing the public purse properly?
    In the HOuse almost every Friday he refuses to answer the questions and basically calls into question the abilities of the Shadow Min and the PLP MPs but he skirts himself around giving any real details with arrogance and condescension. is he the right man for the job?

    • serengeti says:

      But is not ‘regardless of what happened under the PLP’. That just isn’t the reality. We got in this mess under the PLP. That’s just a fact of life.

      • Rhonda says:

        The PLP put us in 1.2b of debt in 14 years….. the OBA has put us in 2.3b and counting debt in 2.5 years….. neither figures takes into account unfunded liabilities….

        • Ed says:

          Rhonda: It took several years before PLP’s reckless money management started to show, it will take many more years to reverse this. Don’t fool yourself into thinking this is anyone’s fault but the PLP’s.

          Many of us won’t live to see Bermuda out of debt. They say ‘a fool and his money are soon parted’. That’s the PLP perfectly defined.

          • watchmen says:

            You are losing on this one Ed. Speak to the numbers boss….

            • Lala says:

              Actually I am afraid that Ed’s correct

            • AJ says:

              The last PLP deficit was over $400 million ($6500 for each of us) and they promised to keep spending constant for 3 years post-election so the PLP promised $1.2 billion in deficits in their first three years.

              You an be angry at the OBA, but if that’s the case you should be more angry at the PLP.

        • Unbelievable says:

          Well it’s nice to see Rhonda FINALLY accept that her team, the PLP, put Bermuda in this financial mess that the OBA is trying to dig us out of.

          Nice one, Rhonda.

      • Johnny says:

        It is regardless of what happened under the PLP, because the OBA guaranteed they would fix the problems. However they have only pushed us further into the abyss.

        It is amazing how the OBA can now quadruple the debt left behind by the PLP in only 3 years, but people are still blaming the PLP. At least the PLP can say (and most impartial people could see) that the collapse of the world economy played a part in their demise, but the OBA has no such excuse, none even close.

        What has the OBA done to reverse the debt – absolutely nothing – except to try and take money out of govt. Workers pockets.

        If claims that the PLP didn’t have any foresight while racking up our debt are to be believed, then surely the OBA must be guilty of far worse after only 3 years.

        • Bermyman says:

          Quadruple the debt? Please explain?

          You do realise that debt usually involves a rate of interest that compounds, thus makes the debt larger when not repaid? That is what is occurring because we spend too much money paying ignorant Union members for cushy jobs that should not exist in the first place.

          “What has the OBA done to reverse the debt – absolutely nothing – except to try and take money out of govt. Workers pockets.”

          Your ignorance speaks for itself in this statement. You don’t want people from outside of Bermuda to live and work here, yet the only way we were able to sustain the bloated civil service was because we had 5,000 more foreign workers on our shores contributing to the economy, health care premiums and paying taxes. That is the only way that the Government can realistically grow our economy back to the levels required to provide over-employment to the Unions.

          Yet every time commercial immigration is suggested, the PLP and the combined opposition get up in arms, spewing xenophobia and attacking the OBA members.

          The economy will not grow with our current population levels, the PLP will not allow the population to grow, so how are we going to pay for the oversized civil service that the hard working Private sector is currently carrying on their backs?

        • watchmen says:

          BOOM!

    • NCM says:

      “Watching” is run by PLP bloggers. Ignore them – their only job is to spread misinformation, distortion and confusion.

      • watchmen says:

        And what are you spreading? Anything useful? Anything Fact based?

  9. how you doin says:

    Why not take some of this money and give back some of the social programs you took from our children and seniors. Or is this backup money for your Americas Cup.

    • Anbu says:

      Seriously?! Do u friggin idiots even comprehend how much money the ac can generate?! It will by no means clear our debt but it can put a huge dent in it. Do some research. Funny how everyone moans and complains about richards not answering questions yet the plp and their cohorts will not even entertain where the damn 800 million went! WHERE IS IT??!!!!

      • Jus' Askin' says:

        800 million has been accounted for by the Accountant General.
        Stop with the lies ;-)

      • Chris Famous says:

        How much tax will the government collect from AC?

    • Bermyman says:

      Because the social programs will not generate economic activity which earns the Government tax $ to pay for social programmes. These socialist bandaid approaches will just further send us down the road of economic peril.

      You have to spend a buck to make a buck! You should not have kept the PLP in power as long as you did, now their most avid supporters are paying the economic price for their ignorance.

  10. Terry says:

    Government has not borrowed the $200 million.

    Can you people read?

    It will be available if needed.

    Find something constructive to do some of you instead of trolling the NET all freekin day.

    Shalom.

    • watchmen says:

      You seem to post everyday…could one on the other side of the divide not consider you a troll?

      You do not get to control the narrative.

      Shalom.

      • Terry says:

        What the hell are you talking about.
        “control the narrative”.

        I merely post a few comments.

        Have you read “To Kill A Mockingbird” ?

        If not wait a few weeks and order “Set A Watchman by Harper Lee.

        No wonder Bermuda is so messed up.

    • Encyclopedia says:

      You wanna bet that the facility will be used up before OBA leaves office??

  11. Jus' Askin' says:

    PLP $1.4 billion in 14 years
    OBA $1 billion in 2 1/2 years

    • Bermyman says:

      What is the debt service on the $1.4bn? Do you even know? We are borrowing to pay for that and Civil Service wages that the Unions refuse to reduce. That is the biggest issue!

      We are essentially borrowing money to pay for selfish Union workers, who the PLP will not acknowledge need to take a paycut.

      • Jus' Askin' says:

        Ministers as well should take a pay cut. Start from the top for once ;-)

        • Starting Point says:

          the ministers could work for zero and it would have no impact.

          Bermudians lack of understanding of how much we owe is the problem.

          • Jus' Askin' says:

            So let everyone know, how much we owe ;-)

  12. Need Peace says:

    So….The OBA inherited $1bn debt from the PLP in 14 years? OBA has been in government for almost 3 years and the debt has more than doubled? I’m not the brightest bulb in the chandelier, but does this mean the OBA is putting us in further peril? $70m to AC, $100m to BTA, that if I’m not mistaken wasn’t mentioned in the budget and came as quite a surprise.

    I think maybe we’re being tricked again

    • SANDGROWNAN says:

      Well, to fair, it’s not that hard.

    • Terry says:

      “inherited”.
      Key word.

      No money to pay bills.
      Tourism down.
      People leaving in droves.

      Where is the money going to come from.

      OBA had to borrow to keep us afloat.

      Never mind. Like talking to a deaf mule. Still just an a**

      Shalom.

  13. Alvin Williams says:

    The PLP got us in this mess; but the borrowing of the OBA government is more saintly than theirs?

    • Jus' Askin' says:

      You really believe that?
      We got ourselves in this mess ;-)

  14. Need Peace says:

    I’ve read the comments and still I’m at a loss! During the PLP’s tenure, we had many capital projects and came out with, let’s say just over $1bn. I can’t recall ANY capital projects but the OBA has surpassed that amount in almost 3 years.

    I do believe the Finance Minister doth protest too much and it’s scary!!!

  15. Bermuda123 says:

    Much of the OBA borrowing has been to pay the interest expense on the debt taken out before they became the Government. The OBA current budget is to break even before debt service. That means that the only way to pay the interest is to borrow more. The other way is to cut expenditure (of which 60% is the salaries of public sector workers). So….. Until we pay civil servants less, we need to borrow to repay interest on debts taken out. The only route is to grow the economy and increase Gov revenues. Which is BTA, BDA, Americas Cup all come in. Economics 101.

    • Jus' Askin' says:

      We are now deeper in debt due to the borrowing with higher interest rates to pay back.

      Bob gambled and We Lost.

      This proves OBA had No Plan ;-)

      PLP was said to have mismanaged funds, so what do we call what the OBA has done?

      Economics 101 – Don’t Borrow Money to Get Out of Debt :-D

  16. Encyclopedia says:

    RFP fopr this but no RFP for Airport….how nice !!

  17. Jus' Askin' says:

    OBA is by far the worst thing to happen to this country. In 2 1/2 years You have past the PLP in dumb actions :-D

    Never did I think anyone would do a worst job than Paula but Bob has definitely, definitely taken the lead as WORST FINANCE MINISTER Ever :-(

    • stunned... says:

      more willful ignorance: a disdain for facts.

      please seriously reconsider your last paragraph and flashback to a statement made by former Premier Cox when asked if the Current Account should be balanced, said this, “I think it’s easy to make it balance, but I’m not sure that is responsible. I don’t consider it a success of being a Finance Minister to have a balanced budget.”

      really? perhaps finance was not her specialty with all due resoect.

  18. Tony Brannon says:

    When Bermuda’s national debt stands at $2.3 Billion and the Minister of Finance has just secured another $200 million, WHY do we continue to ignore the huge tourism opportunity of same sex tourism? Bob Richards
    President Barack Obama has been a leader on this issue. Now all 50 states in the USA allows same sex couples to marry. These folks look for cool places to get married or have honeymoons. Just like any couple. In fact, why is there a difference at all. it is myopic and completely backward of Bermuda?

    • stunned... says:

      you’d think the tourism/weding planners would be all over it lobbying the government. hmm guess not.

  19. Tony Brannon says:

    Debt snowballs. It could be that by 2017 we are $ 3 billion plus in debt and by 2020 $ $ 4 Billion or more….
    This is a train wreck in the making.