HARTFORD, Conn. – Two of the four Wall Street rating agencies lowered Connecticut’s credit rating one notch prior to an upcoming bond sale.
Standard & Poor’s and Fitch Ratings lowered Connecticut’s general obligation bonds from AA to AA-. Moody’s Investors Service and Kroll Bond Ratings affirmed their Aa3 and AA ratings, respectively, but gave the bonds a negative outlook, which means they will be under review for one or two years.
The downgrade, according to S&P Global Ratings credit analyst David Hitchcock, reflects the lack of flexibility in Connecticut’s budget. The rising debt service, pension and other fixed costs are becoming a significant portion of the overall budget and could hamper the state’s ability to make further budget cuts if revenue falls short.
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