Hartford and America: Suffering the Consequences of Political Malfeasance

schiffgold.com /  BY SCHIFFGOLD / OCTOBER 4, 2017 

What happens when government officials spend with virtually no restraint and they don’t have a printing press that can crank out more money?

Hartford, Connecticut.

Last week, both S&P Global Ratings and Moody’s Investors Service downgraded Hartford’s credit rating deeper into junk status. According to a Reuters report, the downgrade puts Hartford near the bottom of the credit scale. This means the agencies view the city as essentially in default with little prospect for a full bondholder recovery.

According to S&P analysts, “A default, a distressed exchange, or redemption appears to be a virtual certainty.”

Hartford’s budgetary performance has been weak for several years, and the management environment remains constrained due to a structurally imbalanced budget with no credible corrective plan.”

Moody’s said there is “increased likelihood of default as early as November” adding that its rating reflects its expectation that bondholders will recover just 65 to 80% of their principal investments.

In other words, if you invested in Hartford’s future, you’re probably about to get hosed.

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