Caribbean-based multinational financial services firm Sagicor is next week set to back a move to Bermuda.

Shareholders of the Barbadian company will vote next Wednesday on redomiciling after the firm was hit by the downgrading of Barbados’s sovereign credit rating to B from BB- last year.

Bermuda’s sovereign credit rating was in April affirmed as A+ by Standard & Poor’s.

The Barbados downgrade meant that Sagicor Life’s rating also dropped, from BB+ to BB-, while Sagicor Finance Ltd’s $150 million ten-year senior unsecured notes were rated B as “ratings on life insurers are capped at two notches above the sovereign rating of the country of domicile”.

The firm, which has been registered in Barbados for 170 years, would have earned a sovereign credit rating of BB+ based on its own performance.

Sagicor, in a statement to shareholders, said: “In order to improve the company’s ratings, both corporate and securities, the company is seeking approval to redomicile into Bermuda, which is an investment grade-rated country.

“This would be achieved via a corporate migration, or continuance, of the company in Bermuda and the discontinuance of the company in Barbados.

“It is anticipated that on successful continuance into Bermuda, which has a stronger and more stable sovereign rating when compared with Barbados, Sagicor Financial Corporation could reasonably expect to receive a Standard & Poor’s rating lift to BB+ unhindered by the restrictions of the current Barbados rating.”

The company statement added: “Improvement in the company’s rating would result in reduced cost of capital, increased attractiveness to regional and international investors and all the attendant ancillary benefits flowing therefrom.

“Accordingly, the board is pleased to present this re-domiciliation proposal to all shareholders for approval.”

Only holders of common shares and convertible redeemable preference shares of the company will be allowed to vote and the Sagicor board is confident they will back the proposal at next week’s meeting.

But the change is unlikely to bring a major jobs boost to Bermuda as the firm would retain its base in Barbados and continue to be taxed there, although it would require an address and resident representative on the island.

The statement said: “No physical relocation of any SFC business in Bermuda is required. Additionally, the continued Sagicor Financial Corporation will have a registered office in Bermuda.”

Sagicor examined relocating to several locations, including Britain, Ireland, Switzerland, Luxembourg, Canada, Trinidad & Tobago and Holland, before deciding on Bermuda.

The company said that Bermuda was chosen due to the ease of redomicilation, tax impact, ratings stability and reputational risk, as well as its good rating internationally.

Sagicor said: “Bermuda is rated investment grade, it has a very tax-friendly regime, it had no regulatory hurdles for our business and the ease of continuance meant it could be achieved in the most efficient way.”

The company operates in 22 countries in the Caribbean, the US, Britain and Latin America.