HAMILTON – Government has negotiated a US$200 million three-year loan facility with Butterfield Bank, Premier and Finance Minister Paula Cox has announced in the House of Assembly.
Cox said the cash will cover an expected $145 million in new borrowings, with the remaining $55 million refinancing outstanding short-term debt.
The borrowings reflect the $147 million Budget deficit for 2011/12 the Premier announced in February. Government’s total debt outstanding was at $1.05 billion then, but is expected to grow to $1.19 billion by the end of this fiscal year.
“We have stated as a government that it will not be business as usual. We have also stated that it is imperative that we look at ways to reduce cost to government,” Cox said in making the announcement.
“The raising of this loan facility provides the Bermuda government with financing flexibility and also keeps this capital here on the island. This will have a positive effect on our balance of payments and helps to maintain the government of Bermuda’s good credit ratings.”
But Shadow Finance Minister Bob Richards hit back, describing as “sheer nonsense” Cox’s claim of the loan facility having a positive effect.
He also said it was a “red herring” to claim the loan facility would help Bermuda’s credit rating.
“Bermuda is not only looked at as an entity by itself but as a part of the overall economy,” he said.
Cox pledged when she became Premier in October, after former incumbent Ewart Brown retired from politics, that she would cut $150 million in government spending within 12 months. (CMC)
