News Release HAMILTON, Bermuda “Bermuda’s economy is on an upward trajectory, with tangible growth evident.” said Premier and Minister of Finance, David Burt, “The Government is committed to fostering continuous economic advancement and development for Bermuda. Our progress in this direction is underscored by Moody’s Investor Service (“Moody’s”) recent affirmation of Bermuda’s A2 issuer and senior unsecured bond ratings, along with maintaining Bermuda’s stable outlook.

“This rating affirmation, which confirms that there is no change in rating since the 2020 report, once again indicates that Bermuda’s bonds are seen to be of good quality with a low credit or default risk.”

In the 2023 credit analysis, it was noted that Bermuda’s ratings were underpinned by the country’s very high levels of wealth, good management of government debt, strong institutions and regulatory framework and commitment to prudent fiscal policy. The stable outlook reflects their assessment of policymakers’ continued commitment to a prudent fiscal stance that will contribute to stabilizing the government debt burden in the next 2-3 years, following the economic shock related to the coronavirus pandemic.

The review emphasized Moody’s confidence in the Bermuda Government’s ability to manage its fiscal position and meet a balanced budget by 2024. Despite the rise in debt to 46% of GDP during the pandemic, Moody’s has confidence in debt stabilizing to 42% of GDP in the next two years, similar to Bermuda’s A-rated peers. The review spoke to the Ministry of Finance’s announcement of Corporate Income Tax Act 2023, which was passed this month. This was noted by Moody’s to be credit positive policy, structurally increasing government revenue and shifting the tax burden from individuals to corporations. Though it was also noted that this may lead to an increase in volatility in tax receipts and could potentially impact Bermuda’s competitiveness, including Qualified Refundable Tax Credits is expected to add to Bermuda’s already appealing attributes for International Businesses.

The review further commented on the Bermuda Government’s swift implementation of its cyber response plan, which greatly reduced the impact of the unprecedented cyber-attack. The review noted that the impact could have been much worse if the Government had not proactively invested in cyber defense. The attack did not affect government tax collection or vital operations, displaying the Government’s risk management effectiveness and operational resilience to threats.

Moody’s expects moderate economic growth for Bermuda, driven by international business sector expansion, tourism recovery and robust construction activity. Tourism is expected to recover to pre-pandemic levels by the end of 2023, and with several tourism properties being redeveloped through 2025, overall employment and activity in the sector are expected to increase. Bermuda’s continued commitment to addressing the affordable housing shortage will partially drive construction activity by building more housing inventory.

The December 2023 periodic review of the Bermuda Government’s Ratings reiterates and highlights many of the same areas that were noted in other rating agency reports. The review highlights the strength of Bermuda’s institutions and governance, reflecting a strong institutional framework and a fiscal policy track record that built credibility, by arresting the deterioration of the Government’s finances in the context of adverse economic conditions. It further highlights Bermuda’s low risks in relation to its banking sector, government liquidity, and external vulnerabilities.

Premier Burt concluded, “Overall, Moody’s periodic review reflected positively on Bermuda and the fiscal management approach being taken to shape our country’s direction. It is gratifying to see that this theme has been highlighted in the rating agency reviews that have been published this year on Bermuda, whether S&P, Moody’s or Kroll.

“These rating affirmations will allow Bermuda to continue to have access to capital at relatively favourable rates. The assessment by Moody’s further affirms the Government’s approach to managing fiscal matters and its future plans in that regard. We look forward to progressing Government’s plans to, in a fiscally prudent manner, strengthen the economy, reduce our debt and create employment opportunities. In this period of positive recovery, the Government is determined to prioritize the prosperity of Bermuda in the long run.”