Fitch Affirms, Withdraws Bermuda’s Ratings

May 22, 2015

[Updated] Fitch Ratings has affirmed Bermuda’s Long-term foreign and local currency Issuer Default Ratings [IDRs] at ‘A+’. The Rating Outlook is Stable and Fitch has simultaneously withdrawn the ratings.

Fitch said, “The ratings are as follows:

  • Long-term foreign-currency IDR: ‘A+’;
  • Long-term local-currency IDR: ‘A+’;
  • Issue ratings on Bermuda’s senior unsecured foreign and local currency bonds: ‘A+’
  • Short-term rating: ‘F1′;
  • Country Ceiling: ‘AA’.

A statement from the ratings agency said, “Real GDP has declined since 2008 and public debt has risen from a low base to around 40% of GDP.

“However, Bermuda’s ratings are supported by its high income [GDP per capita is among the highest of Fitch-rated sovereigns], consistent current account surpluses and strong net external creditor position.

“A sophisticated legal system, strong regulatory framework, simple tax regime, proximity to the U.S. and skilled human capital allow Bermuda to maintain a competitive advantage as a domicile for reinsurance and financial services companies.

“Fitch is withdrawing the ratings for commercial reasons. Accordingly, Fitch will no longer provide ratings or analytical coverage for the issuer.

“Fitch’s forecasts assume that Bermuda’s real GDP stabilizes in 2015-2016, and that Bermuda maintains its attractiveness as an insurance and re-insurance jurisdiction.

“Current account surpluses will provide support to the fixed exchange rate regime.”

Update May 22, 10.33am: In providing clarity to why the ratings were withdrawn, a Government spokesperson told Bernews: “The Ministry of Finance made the decision to cancel the credit ratings contract with Fitch Ratings Agency, as loan covenants only required the use of two rating agencies. The Government decided to use Standard & Poor’s and Moody’s ratings.”

Category: All, Business

Comments (8)

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  1. Raymond Ray says:

    I’m not the brightest crayon in the box but I do know the difference between, “increasing and declining”.
    Note: “A sophisticated legal system, strong regulatory framework, simple tax regime, proximity to the U.S. and skilled human capital allow Bermuda to maintain a competitive advantage as a domicile for reinsurance and financial services companies.”
    (No, Bermuda may not be at the top of the charts but, we sure as hell aren’t anywhere near the bottom.)
    “Fitch’s forecasts assume that Bermuda’s real G.D.P. stabilizes in 2015-2016, and that Bermuda maintains its attractiveness as an insurance and re-insurance jurisdiction.”

  2. NO MORE WAR says:

    Great news

  3. rhonda says:

    The oba fired Fitch’s. What are you people not getting.

    • Lois Frederick says:

      Yes, saving us $1 million a year…We can get by on 2 as opposed to 3 ratings agencies, in our difficult financial position. Especially if they issue ratings without Bermuda paying for them to do so!

  4. rhonda says:

    When you have only one agency accessing you, you can dispute anything they say, confronted in the knowledge that you have blind followers.

  5. Raymond Ray says:

    “Misery, jealousy and envy” they are all related…These are definitely tough times for the Progressive Labour Party and their supporters :-(
    As for the PAC matter, keep on them Ms. Jackson, Mr.Jeff Sousa and Mr. Glenn Smith.

  6. Rhonda says:

    S&P is on thin ice now once oba doesn’t like what they have to say they to will fall by the wayside…