Fitch Revises New Haven’s Bond Future From ‘Stable’ to ‘Positive'

NEW HAVEN, CT — Fitch Ratings assigned a 'BBB' rating to the city of New Haven's general obligation bonds and upgraded the ratings' outlook to "Positive" from "Stable," the mayor's office announced Tuesday.

Fitch sites revenues from the state's revised PILOT program and lowered investment rate of return assumptions, leading to increased annual pension fund contributions, as contributors to their outlook upgrade, a news release from Mayor Justin Elicker reads.

“This is good news for the city,” Elicker was quoted as saying. “From day one, my administration has aimed to paint an honest picture of the city’s financial situation."

In the release from Fitch, it noted that the bonds — $53,610,000 GO bonds, issue of 2021, series A and $38,720,000 GO refunding bonds (taxable), issue of 2021, series B —are scheduled to price via negotiated sale the week of Oct. 18.

The series A bonds will fund various city and school improvements and the series B bonds will be issued to refinance a portion of the city's outstanding GO bonds for savings, the Fitch release reads. It also affirmed the following ratings for the city of New Haven, CT:

--Approximately $625 million in outstanding GO bonds at 'BBB';
--New Haven's Issuer Default Rating (IDR) at 'BBB'.

Elicker said that "historically the city has experienced some financial challenges due to outsized debt obligations and underfunded pensions—but over the past year and a half we’ve taken many steps to get the city heading in the right direction and this upgrade shows that our efforts are bearing fruit."

The mayor said those efforts include, "capping new debt, increasing our annual pension contributions, and working with our state partners to increase PILOT funding have put us on a new, more sustainable, path.”

Read the full Fitch analysis and release here.