City’s bond rating goes from AAA to AA+

Posted By: David Fortier September 23, 2024

By David Fortier

Several Connecticut cities, Bristol among them, have seen their bond rating slip after Fitch Ratings released its latest listing earlier this month.

“The AA+ rating is extremely good and is a strong rating for Bristol,” Bristol comptroller Diane Waldron said in an email in response to TBE about the change. “It is not anticipated to have any negative impact when the City issues debt in the future nor have any material impact on City operations.”

Bristol had been rated AAA prior to its current AA+ rating announced by Fitch.

“The sole driving factor for the change from a AAA to AA+ is a result of Fitch recently implementing changes in their rating criteria and metrics,” she said.

Waldron explained that the trends in the city’s makeup as regards population and unemployment, education and median household were identified as “weak or midrange,” by Fitch and not as the result of “any changes the city did with regard to its finances nor has control over.”

“It should also be noted that this rating is more in-line with the ratings the city has with S&P Global Ratings (AA=) and Moddy’s Investors Service (Aa2),” she said.

In an email to the city council and board of finance at a Joint Meeting, Monday, Sept. 9, three days after Fitch announced its change, Waldron explained the criteria for the changes and their impact.

“Key drivers of the downgrade include a greater emphasis under the new criteria on the city’s demographic and economic metrics, including the city’s population trend assessment identified as “weakest” relative to the Fitch local government rating portfolio, and “midrange” unemployment, educational attainment and median household income levels,” Waldron wrote, citing report.

“It is important to note that there were no identified changes in Bristol’s economic outlook, debt ration or financial stability which are still strong,” Waldon wrote.

Other Connecticut cities subject to the new criterion, included for comparison by Waldron, are Danbury, which saw its Fitch rating slip from AAA to AA+; Manchester, from AAA to AA+; and Waterbury, AA- to A+.

Waldron wrote, also in the email to the city council and finance board, the report’s assessment provides Bristol with “areas of opportunity,” at the same time, noting the report regarded developments downtown, including medical offices, an assisted living facility and mixed-use developments, along with developments outside of downtown, including a hotel and conference center and adult housing in a positive light.

Waldron concluded her email to the city council and board of finance with a quote from the Fitch report: “The ongoing pipeline of development in the city remains supportive of ongoing growth in the grand list.”

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