Cole Simons, the Leader of the Opposition and shadow finance minister, is suspicious of government use of a little-known rating agency to complete a report on Bermuda.

In a statement responding to last week’s announcement releasing the Kroll Bond Rating Agency’s positive outlook for the island, Mr Simons questioned the company’s hiring, when Bermuda traditionally relied on century-old and globally recognised agencies such as Standard and Poor’s, Moody’s or Fitch Ratings.

Mr Simons conceded that the report on the state of Bermuda’s economy and creditworthiness appeared positive.

But he said: “The question floating around Bermuda’s financial community is, who is Kroll Bond Rating Agency (KBRA)? Where did it come from?

“An industry search of the KBRA indicates it is not in the Top Five global credit rating agencies — it's a relative unknown.

“It’s common knowledge that Bermuda has used Standard and Poors, Moody’s and Fitch for most of the past 20 years. Their credentials are impeccable, and their services have stood the test of time.”

He said that Standard and Poor's dates back to 1860, Moody's to 1909 and Fitch ratings to 1913. But the new company is just 11 years old.

“There are hosts of other ratings agencies,” he said, “but S&P, Moody's and Fitch have about 95 per cent of the global market, with S&P and Moody's having about 40 per cent each, while Fitch has around 15 per cent.

“The US Securities and Exchange Commission acknowledged the three as "Nationally Recognized Statistical Organizations" and so, from a rating agency perspective, they are considered the gold standard.

“It costs the Government a lot of money to obtain an international credit rating — but such is the price of credibility. S&P and Moody’s already provide that for us.

“What made KBRA so attractive to the PLP Government that it would spend even more money for its rating and how much more credibility did it buy? There is more to this credit assessment than meets the eye.

“Could it be that KBRA was the only credit rating agency who was willing to help the Government showcase its fintech and digital commerce industries?

“Stay tuned. There is more to this appointment and we await the details.”

Mr Simons said that Bermuda is a top-tier business jurisdiction, itself the gold standard for the delivery of offshore financial services.

“So why,” he asked, “are we deviating from our long relationship with the gold standard of international credit rating agencies; agencies that are intimately familiar with Bermuda’s unique economic model?”

He said that analysis is retrospective and statements about the future rely on factual data, financial governance, credit administration and established trends.

But the minister’s recent credit rating statement reflected KBRA’s favourable forward-looking assessment of Bermuda’s emerging and developing industries, in particular, the emerging fintech and digital commerce industries.

“It is hardly likely,” said Mr. Simons, “that there is sufficient historical data available for such an assessment to be realistic, or up to S&P’s and Moody’s standards.”