Fitch Rating gave New London’s pending debt issue a “AA-minus” rating, but Fitch says the shoreline city’s rising jobless rate, among other things, lends a dim view to the its near-term financial prospects.
Fitch rated $11.6 million of a planned new issue of general obligation (GO) bonds, plus two lots of bond anticipation notes (BANs) totaling $13.3 million. The bonds and the notes are set for sale on Thursday.
Meantime, Fitch affirmed its ‘AA-‘ rating on the city’s approximately $23.5 million in outstanding GO bonds and its ‘F1+’ rating on the city’s $5.4 million outstanding BANs.
The rating outlook is negative.
Fitch said the city’s 11.4 percent jobless rate in September and its revenue shortfall, which has produced a $1.3 million deficit in its general fund in the fiscal year ended last June, are causes for concern.
But approval of a 5.1 percent tax hike and lower appropriations in the town budget for the current fiscal year should help New London correct its structural fiscal imbalance, Fitch said.
