Hamden’s Bond Rating Upgraded From BBB To A-: Fitch

HAMDEN, CT — Credit rating agency Fitch has upgraded Hamden’s rating from BBB to A- with a positive outlook, Mayor Lauren Garrett announced Tuesday.

Fitch is an independent bond rating agency that evaluates the town’s budgets, audits, performance, economic drivers, and long-term liabilities to rate its debt and ability to repay investors.

In 2022, Fitch removed Hamden’s negative outlook, and upgraded Hamden’s ratings outlook in 2023 from Stable to Positive.

In 2024, Fitch Ratings has “upgraded the town of Hamden's (CT) Issuer Default Rating (IDR) and outstanding general obligation bonds to 'A-' from 'BBB,'” according to Fitch’s news release. “The Rating Outlook is Positive.”

“The IDR upgrade to 'A-' reflects improvement in achieving structurally balanced operating budgets and completion of its deficit mitigation and fund balance growth plan,” the Fitch news release states. “Unrestricted reserves have significantly improved due to a series of debt service restructurings and recent positive operating performance. The town has also gradually increased its annual budgeted debt service amount to address pressure from an ascending debt service structure.

“Asset sales have buttressed capital funds, reported outside the general fund, and have improved liquidity. With new management in place since fall of 2021, the town's budgets have included less optimistic revenue assumptions and better expense management. In addition, the town continues to fully fund its actuarially determined pension contributions and has done so since fiscal 2021.”

Fitch also noted that the “IDR upgrade to 'A-' reflects improvement in achieving structurally balanced operating budgets and completion of its deficit mitigation and fund balance growth plan,” according to the news release. “Unrestricted reserves have significantly improved due to a series of debt service restructurings and recent positive operating performance. The town has also gradually increased its annual budgeted debt service amount to address pressure from an ascending debt service structure.”

Garrett said in a statement, “Our Fitch Bond Rating has increased by an unprecedented 2 notches. This is a testament of our dedication to fiscal responsibility and structurally balanced budgets. This rating upgrade will save the Town hundreds of thousands of dollars in lower interest costs on all future bond issues and mitigate or eliminate the need for bond insurance, which will also lower bond costs. This extraordinary ratings increase is evidence of transformational improvements to our fiscal health. Additionally, Fitch assigned a positive outlook meaning there is room for continued ratings increases if we continue to produce structurally balanced budgets.”

Read the full report from Fitch here.