One of the four Wall Street rating agencies downgraded their outlook for Connecticut bonds last Tuesday, citing “the state’s failure to return to more structurally sustainable budgeting.”
Fitch Ratings changed its rating for Connecticut from stable to negative, but it maintained its AA rating for the state prior to the sale of $200 million in general obligation bonds. The other rating agencies, including Moody’s, Standard & Poors, and Kroll maintained their current ratings, all with stable outlooks, in anticipation of the sale.
“The Negative Outlook reflects the state’s reduced fiscal flexibility at a time of lingering economic and revenue uncertainty,” a Fitch analyst wrote. “The enacted budget for the new biennium delays repayment of deficit borrowing, adds to an already high debt load, and fails to rebuild the state’s financial cushion.”
Office of Policy and Management Secretary Ben Barnes said in a statement that he’s “pleased” with the ratings, including the one from Fitch.