Bermuda on alert as Barbados insurer seeks new home
Bermuda has launched a bid to land a multinational insurance and financial services firm from Barbados that is looking for a new home, The Royal Gazette can reveal.
The Caribbean firm Sagicor has signalled that it wants to relocate after ratings agency Standard & Poors (S&P) slashed Barbados’ sovereign rating from B to BB-.
Under S&P rules, individual firms cannot have a higher rating than their country of domicile — which meant Sagicor’s rating was cut from BB+ to BB- — although it would have earned BB+ on its own performance.
Now the firm — which has been registered in Barbados for more than 170 years — is looking for a home that would allow it to up its rating.
A move would mean the firm could better access to capital to fund future development, as well create other business opportunities — and Bermuda retains a AA- rating from S&P.
The company admitted: “Sagicor needs to restore its credit rating.
“Credit ratings are extremely important to financial services companies.
“Credit ratings have achieved wide investor acceptance as tools for differentiating credit quality.
“Investors use these ratings as a measurement to determine the financial status of companies.”
Sagicor added that although the firm was on a sound footing with strong capitalisation and improving operating performance — it would “continue to be impacted by changes in the rating of Barbados.”
Bermuda Business Development Agency CEO Ross Webber said: “We are aware of Sagicor’s news, are looking at it, and have reached out to them with information about Bermuda’s advantages as a premier business jurisdiction.”
Sagicor said it had not made a decision on where to set up shop — but singled out the US, Trinidad & Tobago, and European countries like the UK, Luxembourg and Ireland as possible bases.
But the firm stressed it was “not limiting itself to these locations.”
It added: “A recommendation will be made only after a rigorous evaluation process is completed.
“There are several steps involved in this process and subject to shareholder approval, we expect to have it completed by the end of 2015.”
Sagicor did not respond to questions from The Royal Gazette yesterday. The firm operates in 22 countries in the Caribbean, the USA, the UK and Latin America.