Moody’s Investors Service said Friday it has upgraded the city of Hartford’s bond issuer rating.
The rating agency said it has upgraded the city’s rating from Baa3 from Ba2. It also upgraded the city’s outlook from stable to positive. An improved bond rating would allow the city to access cheaper debt in the future.
The city has approximately $540 million in debt, according to Moody’s, which said Hartford’s “sizable capitol economy” and contract assistance agreement with the state are positive indicators.
Under that assistance agreement, the city’s general obligation bonds are paid by the state of Connecticut, Moody’s said. The agreement was hatched in 2018 as part of a bailout plan for the city, which was facing severe financial challenges and the threat of bankruptcy at the time.
The ratings agency said the upgrade reflects the “city’s continued financial improvement inclusive of cash and reserves that have materially increased over the last five years and are in good position to continue moderate improvement. The upgrade also recognizes the city’s significantly stronger budget management practices and our expectation that these strategies will remain entrenched in the city and survive changes in administration due, in part, to its ongoing collaboration with the Municipal Accountability Review Board (MARB). The city’s improved governance is a key driver of the rating action.”
However, Moody’s did say challenges remain for the city, including “well below average resident wealth and outsized poverty,” that will persist as a long-term issue.
Mayor Luke Bronin responded positively to the upgrade.
“Our team has been extremely disciplined, and we’ve stuck to our long-term fiscal plan,” Bronin said. “We’ve budgeted carefully, we’ve generated surpluses every year, we’ve reduced the property tax rate, and we haven’t taken on a dollar of debt since 2016. This latest upgrade by Moody’s reflects how far we’ve come from the full-blown fiscal crisis our team inherited, and it’s a validation of the work we’ve done to budget with rigor and transparency — and with a constant focus on Hartford’s long-term strength.”
