Hartford Debt Dropped to Junk Status by Standard & Poor's

Hartford Courant ^ | 12 July 2017 | Dan Haar

[Lorianne]

Hartford has hired a lawyer as city officials begin navigating the complex system of bankruptcy. The city is facing a $65 million shortfall this year and it remains unclear whether it will receive any additional state aid.

Standard & Poor's downgraded Hartford debt to junk bond status late Tuesday, less than a week after the financially troubled capital city hired a New York law firm with expertise in restructuring municipal finances.

The Wall Street ratings agency downgraded most city of Hartford outstanding debt to BB, a level that's classified as speculative, also known as non-investment-grade, or junk, from BBB-. That reflects a strong possibility that Hartford could default on its debt or renegotiate it to pay bondholders less money.

The move, announced on the S&P website just after 4 p.m., follows a series of downgrades by ratings agencies over the last year, as Mayor Luke Bronin has warned that Hartford could file for bankruptcy protection if it doesn't receive tens of millions of dollars in additional aid from the state and concessions from unions.

Moody's Investors Service downgraded Hartford bonds last October to Ba2, which is similar to S&P's BB — non-investment grade, aka junk.

[RightGeek]

They managed to drive out the insurance industry too. Aetna leaving Hartford for NYC https://www.nytimes.com/2017/06/29/nyregion/insurance-giant-aetna-is-leaving-hartford-for-new-york.html

[rb22982]

All municipal debt is till way over-rated. My company’s bonds are “junk” status, but has a way lower risk rating than Illinois and many other municipals. Our revenue would have to drop 35% before interest coverage would be an issue (and it dropped 25% in the great recession) with cutting capex or scaling back the dividend.

[LongWayHome]

Hartford has been hurting for a long time. Had a GF there in the 80s who lived right near downtown.....was like a war zone then.