The clock is ticking as the Government seeks to refinance a billion dollars of Bermuda’s debt over the next two years — with half a billion maturing in the upcoming fiscal year, and a $140-million note due this year.

The Federal Reserve Board has raised the Federal Funds Rate already twice since March, making it difficult to refinance at what recently have been historic, low rates.

David Burt, the Premier and finance minister, will have to report to Parliament how he intends to avoid making it more expensive to pay for Bermuda’s debt.

Mr Burt told The Royal Gazette: “We are actively analysing the execution of financing alternatives in order to pre-fund and refinance (the Government’s) upcoming debt maturities ($140-million note due in December 2022, and subsequent ones).

“As always, the timing, size and nature of the refinancing will be subject to market conditions as the Government looks to execute the alternative that provides the most advantageous terms and conditions to Bermuda.”

The potential for the rise in interest rates was said to be one of the most serious risks affecting Bermuda, considering the scale of the country’s debt.

That issue was identified by the Fiscal Responsibility Panel in its annual assessment last November.

The panel of external economists are government advisers for fiscal and monetary policy.

They warned the government then to “be alive to opportunities to refinance debt falling due in the next few years while bond yields are still close to historic lows and spreads on Bermudian debt relative to treasuries remain low.”

The February Budget Statement recognised as much, just ahead of the March adjustment by the Fed, raising interest rates a quarter of one per cent.

But this month, there was Fed intervention again with a second increase — three quarters of a per cent — the largest in nearly 30 years.

And suddenly it is a guessing game as to what a projected July adjustment will bring, and where Bermuda negotiators are, in their refinancing endeavours.

The Premier said in the Budget Statement: “To address those risks, this Government will take steps to access the market to ensure that we can refinance our debt at historically low interest rates in line with the recommendation from the Fiscal Responsibility Panel.”

At the time, he noted in the Budget Statement: “the key upcoming challenge is the need to refinance almost $1 billion in debt over the next two years, with approximately $500 million of it maturing in the upcoming fiscal year.”