Fitch Notes Bermuda’s Low Debt to GDP

Fitch has affirmed Bermuda’s long-term foreign currency issuer default rating at AA+ (stable). Bermuda’s 2007 general government debt as a proportion of GDP was 6.1%, versus a AA category median of 24.1%. A high per capita income, low public debt burden, and mature domestic political system support Bermuda’s creditworthiness, Fitch says. “The ratings also reflect Bermuda’s strong offshore international financial center underpinned by a proven track record of effective management of the economy and business environment,” Fitch adds. Bermuda has a 10% of GDP policy limit for net general government debt and a sinking fund for repayment of future maturities. Limited information about the debt of foreign-owned entities residing in Bermuda remains a key rating constraint, even though these liabilities are highly unlikely to affect Bermuda’s public finances or the domestic financial system, says Fitch.