Municipal-debt watchdog Fitch Ratings lowered its rating on New Britain’s outstanding bonds, citing the city’s poverty and unemployment that make it difficult for it to collect enough to finance its high debt burden.
Fitch said it lowered to ‘A+’ from ‘AA-‘ its rating on New Britain’s $74.7 million in outstanding general obligation (GO) bonds.
It also lowered its ratings outlook for the city to negative from stable.
The downgrade and negative outlook could make it more expensive for New Britain to borrow to finance such things as roads, schools and other municipal projects.
Fitch said the one-notch downgrade was the result of the city’s general fund structural imbalance that has relied upon one-time revenues to support the city’s operations the last three years.
It also cited New Britain’s continued reliance on state funding to provide services to its residents, including education, which Fitch said, “has been very volatile.’’
On the plus side, Fitch said the city’s pensions are well funded and other post-employment benefits, such as health care, are manageable.
