Home Banking & Finance Moody’s downgrades Connecticut’s general obligation debt

Moody’s downgrades Connecticut’s general obligation debt

The ratings agency cited the “continuing erosion of Connecticut's finances."

Moody’s Investors Service downgraded its rating of Connecticut’s general obligation debt to A1 from Aa3. Moody’s also downgraded its outstanding ratings on the state’s special tax obligation senior and subordinate lien bonds to A1 from Aa3, while the ratings on the state-supported child care revenue bonds requiring appropriation for debt service payments were downgraded to A2 from A1.

“The downgrades reflect continuing erosion of Connecticut’s finances, evidenced by the pending elimination of its rainy day fund, growing budget gaps and rising debt levels,” said Moody’s in a statement. “The pressures created by growing fixed costs, coupled with weak economic performance, are unlikely to relent and will raise the risk of credit-negative actions such as deficit borrowing or backloaded financings. The affirmation of the A1 Connecticut Development Authority’s economic development bonds reflects a change in our assessment of the strength of the state’s guarantee of the bonds.”

However, there was some good news: Moody’s affirmed the A1 rating on economic development bonds issued by the Connecticut Development Authority and the VMIG 1 on the state’s General Obligation Bonds, 2016 Series C bonds. And Moody’s outlook on Connecticut was revised to stable from negative.

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Phil Hall's writing for Westfair Communications has earned multiple awards from the Connecticut Press Club and the Connecticut Society of Professional Journalists. He is a former United Nations-based reporter for Fairchild Broadcast News and the author of 10 books (including the 2020 release "Moby Dick: The Radio Play" and the upcoming "Jesus Christ Movie Star," both published by BearManor Media). He is also the host of the SoundCloud podcast "The Online Movie Show," co-host of the WAPJ-FM talk show "Nutmeg Chatter" and a writer with credits in The New York Times, New York Daily News, Hartford Courant, Wired, The Hill's Congress Blog, Profit Confidential, The MReport and StockNews.com. Outside of journalism, he is also a horror movie actor - usually playing the creepy villain who gets badly killed at the end of each film.


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