Government raises $475m in bond issue

TUESDAY, JUNE 26: Government announced today it had raised $475 million in 10-year bonds.

The yield for these bonds is 4.13 per cent.

The announcement came on the same day Fitch Ratings downgraded Bermuda from AA+ to AA over concerns over the island's mounting debt. 

A Government spoksesperson said the use of proceeds included the refinancing of more expensive and shorter term debt with $180 million representing new debt. Government said the refinancing of a $200 million 4.95 per cent loan facility due 2014 would result in savings for Bermuda over the next two years.

The Ministry of Finance said the deal was announced at 9:55am in New York, and had attracted international demand of almost $500 million within one hour with the final orderbook of $1.3 billion enabling the Government to both tighten initial price guidance and upsize the transaction.

US investors bought 67 per cent of the bonds with another Europe 30 per cent going to Europe and three per cent to Asia.

Government conducted road show across Europe and the US prior to today’s issue.

A spokesperson for the Ministry of Finance said: “Despite a large degree of competing supply in the market – nine other Investment Grade deals launched in the morning — the transaction attracted healthy demand and the attention of the world's top investors.”