Downgraded credit rating could cost extra £308,000 in loan repayments

Thu, 19 Oct 2017

The Island's downgraded credit rated could cost the Treasury over £300,000 per year in extra loan payments.

Treasury Minister Alfred Cannan confirmed that the Isle of Man Bank is deciding whether to increase the interest rate on loans provided to local authorities for housing after ratings agency Moody's recently changed the Island's credit rating to Aa1.

The Government has calculated that the maximum full year impact of an increase for housing deficiency payments could be £308,000, although the annual cost would decrease as the loans are repaid.

Since 2015, the Government has used HSBC for local authority borrowing, where the change of credit rating doesn't incur an additional cost.