Hartford Goes JUNK: S&P Drops Hartford Bonds to “BBB-“July 12, 2017
S&P Global Ratings dropped Hartford from "BB" to "BBB-," also known as its "junk" rating, as the state stares down the barrel of bankruptcy.
S&P Global Ratings, one of three major credit-rating agencies on Wall Street, dropped Hartford general obligation (GO) bonds from “BB” to “BBB-,” also known as its “junk” rating, on Tuesday.
ZeroHedge first reported the news.
S&P Global’s release, according to ZeroHedge, cites “very weak diminshed liquidity” and the city’s teeter towards bankruptcy as reasons why they gave Hartford bonds a “junk” rating.
What, exactly, is a junk rating? Investopedia explains:
A junk bond refers to high-yield or noninvestment-grade bonds. Junk bonds are fixed-income instruments that carry a credit rating of BB or lower by Standard & Poor’s, or Ba or below by Moody’s Investors Service. Junk bonds are so called because of their higher default risk in relation to investment-grade bonds
Is the next step for Hartford bankruptcy? Mayor Luke Bronin (D-Hartford) has hired a law firm “to evaluate the capital city’s restructuring options,” according to The CT Mirror.
Bankruptcy in the capital city would have major implications for business and government, not only in Hartford but throughout the state.
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