Hartford, Connecticut’s cash-strapped capital city, suffered a fresh round of credit rating downgrades deeper into junk territory yesterday by two Wall Street credit agencies, a day after the city’s bond insurers said that they were open to debt restructuring, Reuters reported. The downgrades by S&P Global Ratings and Moody’s Investors Service put Hartford almost at the bottom of the credit scale and mean that the agencies view the city as essentially in default with little prospect for a full bondholder recovery. S&P slashed its rating by four notches to CC, and Moody’s dropped the city two notches to Caa3. Moody’s cited an “increased likelihood of default as early as November” and said its rating reflects its expectation that bondholders will recover just 65 to 80 percent of their principal investments.
