S&P downgrades Connecticut’s general obligation debt from A+ to A
On April 13 S&P Global Ratings lowered its rating on the state of Connecticut’s approximately $18.5 billion of general obligation debt outstanding to A from A+.
The outlook is stable, S&P said in the announcement.
At the same time, S&P Global Ratings has raised its rating on the city of Hartford’s $540.1 million of general obligation debt multiple notches, to A from CCC, and removed the rating from CreditWatch, where it was placed with positive implications March 27, following the city signing a contract assistance agreement with the state, which has made this debt a general obligation of Connecticut.
The outlook on Hartford’s GO debt is stable.
S&P Global Ratings has also assigned its ‘A’ rating and stable outlook to Connecticut’s $300-million 2017 series C variable-rate GO bonds outstanding, which were sold in a direct placement with Barclays Capital Inc. on June 28, 2017.
Finally, S&P Global Ratings has lowered its rating on Connecticut’s appropriation-secured debt to A- from A, the state’s moral obligation debt rating to BBB from BBB+, and its short-term bond anticipation notes (BAN) rating to SP-1 from SP-1+ on series 2017 A BANs.
The outlook on all long-term ratings is stable.
“The downgrades follow an increase in Connecticut’s tax-backed debt ratios,” said S&P Global Ratings credit analyst David Hitchcock. “We calculate the state’s total tax-backed debt at June 30, 2017, the end of the most recent audited year, at $23.6 billion, including combined GO bonds, transportation tax-supported debt, and capital leases. Under our state rating criteria, when a majority of our debt ratios exceeds certain thresholds, our criteria adds an extra one-notch downward adjustment to our overall indicative state rating score.”