Bermuda was removed from the European Unions (EU) blacklist for tax havens on May 17. This update is a follow-up to a Kroll Bond Rating Agency (KBRA) research note released on March 19, shortly after Bermuda was placed on the list.
The EU has noted that Bermuda adopted the requisite amendments to its Economic Substance Regulation too late to be considered for the EUs Economic and Financial Affairs Council meeting held on March 12, as previously noted on KBRAs earlier statement, prompting its inclusion on the blacklist. The EU has also noted that further clarification of policy needs to be received concerning economic substance regarding collective investment funds, and this is expected by end-December 2019.
KBRA has maintained Bermudas rating of A+/K1+ (Stable Outlook) throughout the blacklist period, which has now been largely resolved to Bermudas benefit. The speedy removal of Bermuda from the list and the apparent modest associated financial implications have had a limited impact on KBRAs credit analysis.
KBRA will continue to monitor the credit ratings of Bermuda, including progress on the unresolved issue relating to collective investment funds.
To access the full report on KBRAs sovereign ratings of Bermuda, click here.
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KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
Joan Feldbaum-Vidra, Managing Director
Alan Madden, Director
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Van Hesser, Senior Managing Director