(March 6, 2014) –Today, Standard & Poor’s Rating Services (S&P) upgraded the City of Hartford's rating on its general obligation (GO) bonds by two notches from “A” to “AA-“ based on its local GO criteria released in September of 2013. Several factors drove the upgrade including the City’s improving reserve levels, its commitment to fully fund the City’s annual required contribution to the pension plan, its debt position and the City’s steady budgetary performance. Standard & Poor’s also raised the rating on the City’s bond anticipation notes (BANs) by one notch, from “SP-1” to “SP-1+”. These upgrades allow the City of Hartford to borrow money in the future at lower interest rates helping to reduce taxes.
“Since my time on City Council as Chair of the Operations, Management and Budget Committee, I have been worried about the City’s bond rating,” said Mayor Pedro E. Segarra. “And that’s why it was critical to resolve our deficit and hold the line on spending so we do not place further burden on our taxpayers. The bottom line is that we need to encourage investment in our City if we are going to improve our infrastructure, our schools and grow our grand list. This was a collaborative effort, across many city departments, and city employees should share in this good news with our citizens and taxpayers.”
S&P emphasized that the City’s strong financial management and stable budgetary performance were the reason for elevating the City’s rating. Other considerations included Hartford’s broad and diverse economy and position as the state capital. “The stable outlook on the long-term rating reflects our view of the city’s adequate budget performance and flexibility due, in part, to its strong financial practices,” said Standard & Poor’s credit analyst Hillary Sutton.
“I am very pleased to see the City of Hartford receive an upgrade from S&P” said Hartford City Treasurer Adam M. Cloud. Treasurer Cloud went on to say, “As the co-issuer of the City’s debt along with the Mayor, I am proud of this accomplishment. This upgrade is a testament to the efforts of everyone at the City of Hartford to maintain strong financial management practices. However, we should not rest on our laurels, instead we should be even more focused on creating stronger policies, tighter budgeting processes and smarter revenue enhancement strategies that will benefit the taxpayers and residents of this great city”.
Webster Bank, the City of Hartford’s Financial Advisor added, “Standard & Poor’s double notch upgrade of Hartford’s bond rating to AA- is a reflection of the City’s strong management practices, budgetary flexibility and strong financial policies. The rating upgrade reflects a higher degree of confidence in the City and will lower borrowing costs for all future bond issues - saving the City millions of dollars for important capital projects while mitigating the impact on taxpayers.”
Mayor Segarra will kick off the 2014/15 budget season next Monday, March 10 during his State of the City address. The Mayor’s recommended budget will be submitted to the Court of Common Council on April 21.
**Download full Standard and Poor's report: http://www.hartford.gov/images/S&P_Rating_Report_March_2014_-_Upgrade_to_AA-.pdf
For Immediate Release: March 6, 2014
Contact: Maribel La Luz