Finance Minister defends use of Kroll Bond rating agency – The Royal Gazette
Updated: 01 Nov 2021 19:36
Curtis Dickinson, the finance minister, dismissed criticism from the Opposition One Bermuda Alliance over the use of the relatively new rating agency Kroll Bond (KBRA).
Mr Dickinson said Kroll was just one of the rating agencies that had recently provided encouraging news for Bermuda, speaking “favorably of the management of government in these turbulent times”.
He took hold of the main findings of Moody’s Investor Services in July and their indication “Bermuda bonds are considered to be of good quality with low credit or default risk”.
Moody’s has confirmed the A2 Issuer and Senior Bermuda Unsecured Bond ratings, as well as a stable outlook.
The minister said the most recent statement “indicated that Bermuda bonds are considered to be of good quality with low credit or default risk.”
“In the annual credit analysis of July 2021, it was noted that Bermuda’s ratings were underpinned by the country’s very high levels of wealth, strong institutions and a regulatory framework and its commitment to fiscal policy. careful.
“The stable outlook reflects their assessment of the continued commitment of policymakers to a prudent fiscal stance that will help stabilize Bermuda’s debt burden over the next 2-3 years, following the significant economic shock. suffered in 2020 as a result of the coronavirus pandemic. “
Mr Dickinson said Moody’s cited the government’s economic stimulus package and a number of other questions to show it was on the right track.
He said: “Regarding the government’s fiscal strength, Moody’s analysis states: ‘The current Progressive Labor Party government has maintained fiscal consolidation, which has enabled Bermuda to maintain the measures of the United Nations. relatively stable debt.
“The public should take note that this has been accomplished despite a significant economic contraction and increased spending related to the crisis, adding further pressure on Bermuda’s debt burden.
“The report further highlights that Bermuda’s debt burden continues to be in line with that of A-rated peers, and Bermuda’s fiscal performance is also expected to remain above that of related peers.”
Mr Dickinson said Kroll scored equally high on some aspects of the quality of Bermuda’s economy management.
But if the OBA questioned the reasoning behind the use of the “new 11-year-old” Kroll rating agency, comparing it to its century-old and better-known competitors. he defended the use of the agency.
• Kroll receives no government compensation for Bermuda surveillance report
• Kroll approached the government and offered the annual note
• Kroll provides ratings for a number of Bermuda financial institutions
• Bermuda maintains its relations with the other main rating agencies
• They all look down on Bermuda and also see the benefits of Bermuda’s fintech policies
The Minister said: “Bermuda’s credit scores are critical when it comes to our ability to borrow money at favorable rates and are also relevant for businesses operating from and within Bermuda. .
“They are also essential to the continued strength and growth of our economy. Therefore, we will continue to do what is necessary, with the support of the people of Bermuda, to maintain and strengthen these ratings in a way that helps ensure a better and better future for all. “
Curtis Dickinson, Minister of Finance (file photo)