Fitch Affirms and Withdraws Bermuda's Ratings at 'A+'

By added on 22/05/2015

Fitch Ratings has affirmed Bermuda's Long-term foreign and local currency Issuer Default Ratings (IDRs) at 'A+'. The Rating Outlook is Stable, reports Reuters.

Fitch has simultaneously withdrawn the ratings. 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'. Real GDP has declined since 2008 and public debt has risen from a low base to around 40 per cent 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 US 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.