Hartford’s general obligation bonds received a sizeable boost in ratings late last week following the state bailout agreement that seeks to absolve some of the city’s debt, according to Moody’s Investors Service’s website.
Moody’s Investors Service, a Big Three credit rating agency, upgraded Hartford’s bond rating from Caa3, the third to lowest rating indicating the bonds to be “not prime non-investment grade,” to A2, a prime investment grade one notch below the state of Connecticut’s overall rating, according to Moody’s website.
“The A2 ratings on the City of Hartford's GO bonds reflects the strong legal provisions governing the state's obligation to make contract assistance payments on the bonds pursuant to a contract for financial assistance, and the essentiality of the state's commitment to its capital city,” Moody’s website said. “Connecticut's outlook is stable, reflecting the pending replenishment of the state's rainy day fund and the state's strong provisions to promote fiscal discipline.”
The recent bailout agreement seeks to shift the responsibility of Hartford’s annual debt service payments over to the state and also refinance the debt to ensure that annual payments do not exceed $40 million.
Hartford Mayor Luke Bronin said that this bond rating increase is proof that the work he has done for the city of Hartford has been successful and will be beneficial in the long run.
“Today’s dramatic ratings upgrade underscores the importance of the comprehensive work we’ve done to put the City of Hartford on a sustainable path, through deep and difficult cuts, significant labor savings, the engagement of our business community and through a new partnership with the State of Connecticut,” Bronin said. “Maintaining future stability depends on continued discipline, continued partnership with the State, and most of all on achieving real economic growth in the years ahead. But today, Moody’s responded to our collective efforts with an important and welcome vote of confidence.”
Andrew Miano is a campus correspondent for The Daily Campus. He can be reached via email at firstname.lastname@example.org.