Securities insurer Assured Guaranty Ltd. said on Monday it would grant Hartford, the capital of Connecticut, a municipal bond that offers financial support, a move that could help the city avoid filing for bankruptcy.
Hartford would likely seek to file for bankruptcy if the state does not have a budget in place in 60 days, Mayor Luke Bronin had warned earlier this month.
Assured Guaranty said it met with leaders of Hartford, members of the governor’s staff and other state and local representatives about the city’s fiscal challenges.
The Bermuda-based company said the general obligation bond refinancing “takes advantage of new state legislation and reduces and levels the city’s annual GO bond debt service over the next 15 years.”
Connecticut has been struggling with high taxes, $73 billion of pension and debt obligations, people leaving the state and falling revenues. It faces a $3.5 billion deficit over the next two years.
Earlier this month, ratings agency S&P downgraded Hartford’s rating by four notches to ‘B-‘, pushing it closer to junk status.
Other cash-strapped U.S. cities, including New Jersey’s gambling hub Atlantic City, have been forced to accept financial oversight as a condition of receiving a state bailout.
(Reporting by Bhanu Pratap and Parikshit Mishra in Bengaluru; Editing by Savio D’Souza, Bernard Orr)
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