The Bermuda Government has negotiated a $135 million loan agreement with Butterfield Bank, David Burt announced today.

The Premier said the loan, which will cover the 2017-18 fiscal year and a portion of the 2018-19 year, was called for under the One Bermuda Alliance government.

He added that the Government “has not borrowed $135 million” but that the funds would be drawn on if needed.

Bermuda’s net debt stands at almost $2.5 billion, up from $277 million in March 2008.

Mr Burt told MPs: “Considering the Government’s current debt profile and the size of the borrowing requirements, the strategy for 2018/18 is to borrow in Bermuda on a short-term basis.”

Mr Burt said that the Ministry of Finance had been looking at strategies to meet Government’s financing needs for this financial year since April.

He added a public debt management advisory group had been picked, made up of Barclay Simmons, the chairman, Nathan Kowalski and Lothar Crofton, after a request for proposal was put out.

Mr Burt said: “The main objective of this group was to ensure that the Government’s financing needs are its payment obligations are met in the most efficient manner possible over the short to medium term, consistent with a prudent degree of risk.”

He added: “It is anticipated that, despite unbudgeted commitments of the former administration, this transaction will meet Government’s total financing requirements for fiscal year 2017/18 and a portion of the 2018/2019 deficit.

“The loan matures in 2019 and Government has the option to either refinance this debt or it can be paid off using the sinking fund.

“The decision taken will be dependent on market conditions at the time of refinancing and the balance in the sinking fund.”