Attorney General Richard Blumenthal has written a letter to Moody’s Investor Services about the current system of rating public bonds issued by state and local governments.
“As you know, municipal and other public bonds frequently receive substantially lower credit ratings than corporate bonds with the same or worse rates of default,” wrote Blumenthal. “This dual rating system costs the State of Connecticut, its municipalities and other public entities millions of dollars in unnecessary interest and fees every year.”
In the letter, Blumenthal calls the system unfair and said it causes an estimated $2.6 million in unnecessary public costs annually. Blumenthal is urging Moody’s to consider changes to the system, making bond insurance available for a lower cost.
