Standard & Poor’s Ratings Services revised its ratings outlook on Bermuda to negative from stable, citing concern about risks to the island nation’s external and fiscal position from its banking system.
Bermuda’s two main industries, international financial services and tourism, have both felt the effects of the global recession. Two weeks ago, Moody’s Investors Service lowered its government-bond ratings on Bermuda, knocking Bermuda off its Aaa perch amid the effects of the credit crisis on the country’s insurance industry.
S&P, meanwhile, on Friday affirmed its AA long-term sovereign credit rating on the country, which is located off the east coast of the U.S., saying Bermuda’s low government indebtedness was about the lowest of its rated sovereigns. Still, S&P warned it expects general government deficits to rise to 5% in 2009 and 2010 from 3% in 2008.
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