S&P affirms Bermuda's AA rating, stable view

Standard & Poor's said it affirmed its AA long-term and A-1+ short-term sovereign credit ratings on Bermuda, reflecting the country's record of prudent economic management. The outlook remains stable.

The ratings reflect a low level of government indebtedness, among the lowest for rated sovereigns. Given the fixed exchange rate with the U.S. dollar, such policy flexibility is key to Bermuda's creditworthiness, S&P said.

As a global leader in international business, largely reinsurance, Bermuda enjoys high per capita income and a solid economic performance, S&P said.

But its limited economic diversification makes Bermuda highly vulnerable to external factors, including an event that would impair tourism or changes in tax and regulatory environments that could undermine its international business sector, S&P said.

The stable outlook reflects S&P's expectation that the offshore financial sector will continue to thrive as the main engine of economic growth.

S&P said it anticipates that progress in diversifying the economy will be slow, remaining a constraint on the ratings.

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