S&P Global Ratings has revised Bermuda’s outlook to positive from stable, while affirming the territory’s ‘A+’ long-term sovereign credit and senior unsecured debt ratings.

In its latest review published on May 4, 2026, the ratings agency also affirmed Bermuda’s ‘A-1’ short-term rating and left unchanged its ‘AA+’ transfer and convertibility assessment.

The improved outlook reflects expectations that Bermuda’s fiscal position will strengthen over the next two years, driven largely by anticipated gains in corporate income tax revenue.

S&P said it expects the new tax stream to significantly improve government finances, allowing Bermuda to fully repay an upcoming debt maturity due in January 2027. This, it added, could support a return to a net general government creditor position.

The agency also pointed to expectations of policy continuity, even amid a planned leadership transition within the ruling Progressive Labour Party. It said it anticipates that core economic and fiscal policies will remain stable.

Bermuda’s economy was described as remaining resilient, underpinned by strong performance in its key international business sector, particularly insurance and reinsurance, alongside a smaller but steady tourism industry.

S&P said it expects Bermuda’s per capita income levels to remain among the highest globally, supported by sustained activity in the international financial services sector.

However, the agency warned that risks remain. A downturn in Bermuda’s international financial services industry, including potential job losses or global shifts in the insurance market, could weaken the economic outlook and fiscal position.

It also noted that sustained government deficits, rising debt servicing costs, or a significant reduction in liquid assets could lead to a downgrade within the next two years.

On the upside, S&P said Bermuda’s rating could be raised if the government successfully reduces its debt burden, demonstrates sustained corporate income tax performance, and maintains institutional stability alongside continued strength in its key industries.

The agency added that while early signs of revenue performance from the new tax regime are positive, some uncertainty remains over its long-term impact, particularly in relation to tax credits and global insurance sector trends.

Bermuda’s Premier and Minister of Finance, David Burt, welcomed the development. 

“S&P’s decision to improve Bermuda’s outlook to Positive while affirming our A+ rating is an important signal of growing confidence in Bermuda’s fiscal management. Together with last week’s confirmation from KBRA, Bermuda now holds A+ ratings with Positive outlooks from two independent ratings agencies. This reflects the tangible impact of stronger revenues, disciplined debt reduction, and an economy that continues to perform well in a challenging global environment,” he said in a statement.