Moody’s Investor Service has warned that Bermuda’s government bond rating could face a downgrade. Moody’s said that the island’s ‘small and relatively undiversified economy left it vulnerable to the effects of the global financial crisis’.
According to Bermuda’s Finance Minister Paula Cox the credit ratings agency will send a delegation to visit the island in the coming weeks to conduct a thorough assessment, admitting that she was not surprised that Moody’s wanted to review Bermuda’s rating in the difficult economic environment.
Moody’s will now assess Bermuda’s international financial services business and tourism sector to determine the amount of damage caused by the downturn, since Moody’s last assessment in 2001. Moody’s have warned that the downturn would be the main factor in any revision of ‘Bermuda’s very high ratings. Bermuda holds an Aa1 foreign debt rating and an Aaa debt rating at a local level.
According to the Bermudan Ministry of Finance, Moody’s will review the Bermudan economy for the following three months in order to make a comprehensive assessment of the island.
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