For the second time in nine months, Moody’s Investors Service has downgraded Hartford’s debt.
The company this week revised its rating on $434 million of debt from “A2” to “A3” and reaffirmed a negative outlook.
An A2 rating is right in the middle of what Moody’s considers investment grade debt, while A3 is a rung below it. A negative outlook indicates the likely direction of future ratings actions.
Moody’s also assigned an A3 rating to $76 million worth of new general obligation refunding bonds.
The downgrade reflects what the rating company views as the city’s weak financial position, reliance on one-time revenue to balance its budget, narrow financial reserves, pension and debt liabilities, limited ability to raise additional revenue, and expectations of only modest improvement for the fiscal year ending next week.
Those were many of the same reasons cited by Moody’s in Octotber 2014, when it downgraded the city’s rating for the first time in four years, from A1 to A2.
Prior to that, the city’s Moody’s rating had been at A1 since 2010, thanks largely to budget surpluses.
