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Wall Street’s “Big Three” Credit Agencies All Downgrade CT, in Six-Day Span

May 18, 2017 By Staff
Wall Street’s “Big Three” Credit Agencies All Downgrade CT, in Six-Day Span

Moody's, Standard & Poor's, and Fitch Ratings downgraded from an "AA" rating to an "A" rating this week, the latest string of bad news for the state.

Standard & Poor’s (S&P) Global Ratings downgraded Connecticut to an “A+” rating on Wednesday, from “AA” status, as the state’s deficit grows and a budget deadline approaches for state leaders.

Reuters reported that the downgrade made Connecticut “one of the lowest-rated states in the country”:

That makes Connecticut one of the lowest-rated states in the country, with Fitch and Moody’s ranking only Illinois and New Jersey worse. For S&P, Connecticut is now rated A+ with a stable outlook, fourth worst behind Kentucky.

S&P was the third of the ‘big three’ credit agencies to downgrade Connecticut this week.

Last Friday, Fitch Ratings downgraded Connecticut from “AA-” to “A+,” due to outstanding bond debt and “chronic economic and fiscal challenges.”

On Monday, Moody’s Investor Services downgraded Connecticut from “Aa3” to “A1” due to the “continuing erosion of Connecticut’s finances, evidenced by the pending elimination of its rainy day fund, growing budget gaps and rising debt levels.”

Bond ratings are determined mostly by “a bond issuer’s financial strength, or its the ability to pay a bond’s principal and interest in a timely fashion.” Ratings run from a high of “AAA” to a low of “BBB-.”