July 12, 2017

Hartford's S&P Global rating reduced to 'junk' status

S&P Global Ratings has downgraded Hartford debt to junk bond status.

S&P lowered its rating for most of the city's outstanding debt to BB from BBB-, a level that's classified as risky non-investment grade, or "junk" status. Bond credit ratings represent an institutions' creditworthiness.

The downgrade comes on the heels of Hartford Mayor Luke Bronin's hiring of a law firm to advise the city on possible municipal finance restructuring, including bankruptcy.

The "active" consideration of bankruptcy was a factor in the decision to lower the bond ratings, said S&P credit analyst Victor Medeiros. He said it reflects the agency's opinion of "very weak diminished liquidity, including uncertain access to external liquidity, and very weak management conditions… ."

S&P also retained a CreditWatch with negative implications, which reflects continued financial pressure because it's unclear if or how the state "will provide timely, extraordinary aid" to Hartford's next budget.

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