According to domestic reports and Bloomberg, the Minister of Finance and her team, along with the support of HSBC Bermuda, have been hard at work. Last week, delegates travelled across the globe to the US, UK, Asia, and Europe in a marketing road show.

The purpose: to present to international and institutional investors abroad the opportunity to invest long-term in the economy of the island of Bermuda.

The product for sale: Bermuda Government bonds

Bermuda needs foreign currency. We take pride in our unique local currency; the tourists love taking it home as souvenirs, but it does not command value on the world stage.

Investment by foreigners with their hard currency, therefore, is a vital component of our trade, our economic growth, and the long-term financial success of the country, businesses, and our residents.

Think of it this way - you can't even buy a loaf of bread, or a new pair of shoes without vendor foreign exchange conversion of Bermuda dollars to purchase flour and shoe styles abroad.

What do investors want to see in an investment offered by a foreign government?

Top of the list criteria are a politically stable, financially sophisticated, economically open and successful jurisdiction that has global conforming financial reporting, a strong legal environment and judiciary system, international regulatory standards, ethics, transparency, and responsibility in political processes, freedom of press and individual rights, economic stability and sustainable high country credit quality ratings from global rating agencies.

But most importantly, investors want access to freely available information. Freedom of press and full disclosure of all relevant material information is absolutely crucial to the investment decision making process.

Investors must have certainty and comfort (in lower risks) when investing vast sums of money.

Is there a roadblock in the way?

In a few days, in a matter of a few votes, it is proposed that the Media Council Act will be debated in Parliament. If the Act passes, it will hurt our credibility in the global marketplace, our current financial reputation, our economy, and our pocketbooks - not a good thing in a recessionary environment.

Statistically, the most successful economic societies are open, democratic, and free societies. We put up with the warts, and the whining in order to have our individual rights.

Suppression of free speech and censorship of the media creates uncertainty and instability. If investors have to overcome uncertainty, and instability in making investment choices, they won't. They will go where their money is wanted.

Sell Bermuda's excellence

Currently, Bermuda has high marketable value and has earned a reputation of excellence as an international finance centre. We should treasure that reputation, a reputation that cannot be lost, as it will be almost impossible to retrieve.

Bermuda and its residents have withstood the test of time for hundreds of years. We are older and have survived longer than the American colonies. We've had amazing economic success with no manufacturing base or renewable natural resources.

Our banks are more than a century old; our legal trust structures have been used on a global basis for more than a hundred years. We have a remarkably high concentration of sophisticated and innovative intellectual capital.

We were remarkable shipbuilders, sailors, and navigators, all traits demanding supreme intelligence and innate skills. We have always been proud, generous, hard working, and courteous people.

These are attributes that we should be proud of. Whether the Bermuda product is a bond offering, a tourist initiative, or a new international business presence, we want to be at our best in every aspect of our society. We have been and can continue to be our own best salespeople.

What will the Bermuda bond offering look like?

Bonds are debt. It is public debt we are talking about (this means yours and mine) because the Government is selling bonds to investors in exchange for a promise to repay the bonds (loan) at some future date with interest. Bermuda has to earn the capital to service this debt, so it is important to understand this initiative.

An initial bond offering is a debt agreement that is set forth in a legal document called an indenture. The terms of the bond(s) are laid out clearly:

• The date of maturity, i.e. five years, ten, years.

• The coupon rate - this is the interest rate that will be paid to the bond purchaser over the life of the loan

• The minimum purchase amount

• Other conditions, such as the pledging of collateral which is the property that the borrower must offer to secure the loan.

Generally, governments do not use property as collateral, as it may be prohibited under the regulations. Governments, however, do have the right to tax, issue money and control expenditures to fulfill the debt obligations as they arise.

There are a number of other steps that are implemented to place a bond offering into the public domain, including the role of the trustee, underwriter, securities exchange, advisors and other interested parties.

Stay tuned for part 2 next week.

Martha Harris Myron, CPA, CFP(US) TEP(UK) JP- Bermuda is an international Certified Financial Planner™ practitioner in private wealth management. She specializes in independent fee-only cross border investment, tax, estate, and strategic retirement planning services for Bermuda residents with cross-border and multi-national connections, internationally mobile people and US citizens living abroad. For more information, contact martha.myron@gmail.com">martha.myron@gmail.com or 296 3528 at Patterson Partners Ltd