Government purchases Caroline Bay loans
The Ministry of Finance has completed the $170 million purchase of Government-guaranteed loans at the stalled Caroline Bay resort, it was announced yesterday.
The move means island-based reinsurers Arch Capital Group and Axis Capital Holdings have no remaining interest in the Morgan’s Point development.
Curtis Dickinson, the finance minister, earlier condemned the former One Bermuda Alliance government for putting the island “on the hook” for the guarantee three years ago.
Mr Dickinson was required to increase the debt ceiling by $250 million to $2.75 billion last month so the ministry could secure a $200 million credit issued by Butterfield Bank and HSBC to purchase the loans.
He said yesterday: “While the investments by Arch and Axis were guaranteed by the Government, their support for the project and Bermuda in general goes back far earlier.
“With respect to these project loans, until recently they had not received a single interest or principal payment. I would like to personally thank them for their patience and continued commitment to Bermuda.”
Preston Hutchings, the chief investment officer of Arch Capital Group, said: “Caroline Bay was, and still can be, an important project to stimulate employment and tourism growth in Bermuda.
“We were delighted to support it, but unfortunately the developers experienced financial difficulties that to date have prevented completion of their vision.”
Mr Hutchings said Arch had worked with the minister to try to “achieve a different result”.
He added: “Unfortunately, that did not work out, but I would like to thank the minister for keeping us duly informed throughout the process. I wish all parties success in seeing the project through to a better result, and we will continue to be committed to Bermuda.”
Albert Benchimol, the president of Axis, said: “The current status of this project is unfortunate, but we are grateful for the responsiveness of the minister and the Government in working towards a conclusion to this difficult situation.
“We made this investment to support Bermuda’s economic growth and we remain committed to the island and its economy.”
Mr Dickinson added: “I would also like to thank the local banks and their teams who supported the Government by providing favourable terms and timely execution of the credit facility to help meet our short-term obligations.”
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