The Government of Bermuda welcomes the latest ratings action from Moody’s Ratings, which has upgraded Bermuda’s domestic and foreign currency long-term issuer ratings and foreign currency senior unsecured bond ratings to A1, while maintaining a stable outlook. 

In its report, Moody’s said the upgrade to A1 reflects the “improvement in fiscal strength” expected to continue following the introduction of corporate income tax. Moody’s stated that this reform represents a “structural increase in government revenue,” which it expects will translate into “a sustained track record of fiscal surpluses,” “continued improvement in debt affordability,” and “a faster and durable reduction” in the Government’s debt burden. 

Premier and Minister of Finance, the Hon. David Burt, JP, MP, said: “This is a major vote of confidence in Bermuda, as it represents a direct improvement in our sovereign credit rating rather than an outlook change. Moody’s is one of the world’s leading ratings agencies, and its decision to move Bermuda to A1 places the Island more firmly within the upper tier of investment-grade jurisdictions, reinforcing international confidence in our economic and fiscal management. 

“This upgrade is especially significant because Moody’s recognises that Bermuda’s fiscal strength was already improving before corporate income tax (CIT), and that the introduction of CIT now provides a structural increase in revenue that can support sustained surpluses, lower debt, and improved debt affordability.” 

The agency said the stable outlook reflects a balance between Bermuda’s improving fiscal strength, strong institutions and very strong external position, against structural constraints linked to the Island’s size, limited diversification, and modest trend growth. Moody’s also pointed to Bermuda’s “strong institutional quality,” “effective policymaking,” “persistent current account surpluses,” and “large positive net international investment position” as factors supporting the country’s credit profile. 

Moody's becomes the third major international credit ratings agency in recent weeks to acknowledge Bermuda's strengthening fiscal position, and the first to issue a full ratings upgrade, following improved outlooks from KBRA and S&P Global Ratings. 

Importantly, Moody’s also noted that “even before the benefits of corporate income tax accrue, fiscal strength had improved steadily in recent years, supported by continued fiscal consolidation,” while Bermuda’s “very strong external position reduces vulnerability to external shocks and supports the credit profile.”

Premier Burt continued, “This progress represents deliberate choices. Bermuda is in a stronger financial position today than it has been in years. This progress has not happened by accident. It is the result of disciplined financial management, steady economic leadership, and a clear plan to use new revenue responsibly. We have worked to restore the public finances, return the budget to surplus, reduce pressure from debt, and create more capacity to invest in the needs of our people." 

Additionally, Moody’s said Bermuda’s fiscal strength will increase as revenue rises, improving debt affordability and supporting a downward trend in debt. The agency expects higher revenue to support “sustained fiscal surpluses of around 5% of GDP in the next two to three years” and continued debt reduction. 

The report further noted that Bermuda’s debt burden is expected to decline to 27% of GDP in 2026-27, down from a peak of 49% in 2020, while the interest-to-revenue ratio is expected to fall to less than 6% in 2026-27, compared with 13% in 2020. 

Moody’s also highlighted the Government’s plans to reinforce the fiscal policy framework, including fiscal rules, the establishment of a stabilisation fund, a sovereign wealth fund, and the continued use of the sinking fund. The agency said these measures would “support the durability of fiscal surpluses” and a “more resilient decline in the debt burden.” 

Premier Burt concluded, “This is more than just a rating. For Bermuda, this upgrade has real and practical benefits. A stronger credit rating supports investor confidence, enhances our credibility in global financial markets, and improves our ability to access financing on more favourable terms when needed. Stronger public finances mean lower debt, lower interest costs, and more of the public’s money available for priorities such as healthcare, housing, education, infrastructure, tax relief, and support for working families.” 

The Government will continue to manage the public finances responsibly, reduce debt pressures, protect stability, and ensure that Bermuda’s stronger financial position delivers greater security and opportunity for Bermudians.