[This story has been updated.]
Two insurance companies that insure the Capital City’s debt say a long-term refinancing could help Hartford avoid a bankruptcy filing.
Bermuda-based Assured Guaranty Ltd. and its subsidiaries provide financial bond insurance services to municipalities, including the city of Hartford. On Monday, the company said it has discussed measures with Hartford Mayor Luke Bronin, members of the governor’s staff and other state and local representatives to refinance the city’s debt over a 15-year period, in order to keep annual debt payments around $40 million.
New York-based Build America Mutual, which also insures part of the city’s debt, confirmed Monday with the Hartford Business Journal that it agrees with the Assured Guaranty proposal.
“We appreciate Mayor Bronin’s stated willingness on today’s [conference] call [with investors] to consider proposals from BAM, Assured Guaranty, and bond investors, and look forward to continued dialogue,” BAM said in a statement.
In an email following the public conference call with multiple stakeholders, for which the mayor said he did not take questions, he stated his administration is not interested in “pushing off” financial solutions for the city to “another generation to fix.”
At the same time, he said the restructuring of debt “could represent one important part of a multi-part plan” for avoiding bankruptcy, but that it must be sustainable and include “a substantial and sustained increase in revenue from the state.”
As of Sept. 25, Assured Guaranty insured $311 million of Hartford’s “GO” bond debt, said Ashweeta Durani, vice president of corporate communications for the company. She declined to elaborate on the 15-year refinancing or other steps the city could take to address its long-term debt load and avoid bankruptcy.
BAM handles $103 million worth of Hartford’s GO bond debt, said Michael Stanton, BAM’s head of strategy and communications.
Hartford’s total debt service payments peak at more than $60 million in 2021, and decline gradually as they extend to more than $10 million through 2036, according to an FAQ put out by Moody’s Investor Service in early August.
