Hartford's bond rating lowered again - WFSB 3 Connecticut

Hartford's bond rating lowered again

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Hartford's bond rating was lowered again. (WFSB file photo) Hartford's bond rating was lowered again. (WFSB file photo)

Standard and Poors has now dropped Hartford’s bond rating for the second time in just two weeks.

The city's rating is now a "CC" down from a "B-." Another major agency, Moody's, lowered it two levels to a CAA3.

"The downgrade to 'CC' reflects our opinion that a default, a distressed exchange, or redemption appears to be a virtual certainty," S&P Global  Ratings credit analyst Victor Medeiros said in the report. 

"I'm not just focused on ratings, I'm focused on the long-term path, you know what's important is that we get our capital city not just to a place where it can be stable and solvent but strong and growing," said Hartford Mayor Luke Bronin.

The report stated that Hartford "could take additional action to lower the rating to 'D' if the city executes a bond restructuring or distressed exchange, or files for bankruptcy."

"The numbers speak for themselves, you know, what you see is a structure that's just not built to work you've got a city that half the property is not taxable, you got a city based on the tax base of a suburb, you got a debt service burden that increases dramatically in the years ahead and you got a state that right now has no budget," Bronin said.

Hartford has an outstanding debt around $530 to 550 million with a deficit this year of $50 million. 

“One of the challenges of that deficit is they don't have the resources the money coming in to fund the interest payments on the debt as well as the repayment in some manner,” said Ken Goroshko, economics professor at the University of Hartford.

He said loan insurers have come up with a proposal.

“To restructure debt for the city of Hartford from a 15-year period to a 30-year period if that happens it could give certain debt obligations relief to the city of Hartford in time for them to negotiate an appropriate contract with them and the state of Connecticut,” Goroshko said.

Bronin said restructuring must take place either way.

“We've got a system that is not sustainable that if you want to make that system sustainable outside of a Chapter 9 bankruptcy then it takes a new partnership with the state of Connecticut as well as with labor and bond holders,” Bronin said.

All week, Channel 3 has been profiling the Capital City's money problems.

To read the full report, click here

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