Government last week announced the successful refinancing of $75 million in debt - and said closing the senior note issue for Bermuda was a testament to its prudent fiscal management of the public purse.

The refinancing, which was first announced earlier this year, was done as a previous $75 million in debt came due to senior note holders this month.

The money has been reborrowed through a ten-year private placement arranged by the Bank of Bermuda/HSBC.

On Friday, the transaction was cited as having received “excellent execution and record low spread” because of the country's “strong and steady economic and fiscal management”, said Finance Minister Paula Cox in the House.

The refinancing - with the $75 million debt being included in the country's current loan facility of $245 million - was closed after due diligent assessments were completed by the investors. Ms Cox said those assessments had been passed with “flying colours” and had involved in-depth analysis of the Island's political and social stability; stability of the business base; historical record of fiscal responsibility; current level of fiscal responsibility; the Government's macroeconomic policy; capacity to levy taxes; per capita income; current account surplus/deficit; trade account surplus/deficit; confidence in legal system; regulatory environment and state of the infrastructure.

Ms Cox said the interest from investors in the refinancing “attested to Bermuda's high credit rating - which itself is due to the Government's strong and steady fiscal management”.

She added: “Confidence has been maintained in the Bermuda credit story and there remains a substantial investor appetite for Bermuda Government paper as illustrated by the over subscription of this transaction.”

The placement was said to also have helped Government “develop solid relationships with an important group of key institutional investors and has enhanced the Government's international reputation in the market”.

Bank of Bermuda's head of corporate banking, William Welton, said the placement was a sign of what the bank could do under new owner, global banking giant HSBC Plc.

“Our Bermuda clients no longer have to rely upon overseas bankers,” he said.

The bank now has, after its sale to HSBC closed in February, a much larger capital base allowing it to take to be involved in costly loan and debt arrangements, something it was largely precluded from in the past because of its relatively small balance sheet.