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Debt Market

Moody's Downgrades State Bonds; Malloy Chief Complains

Moody's Downgrades State Bonds; Malloy Chief Complains

After the largest tax increase in Connecticut state history, a key Wall Street rating agency downgraded the state's bonds Friday as the state is teeter-tottering toward a deficit in the current fiscal year.

The  Moody's  Investors Service rating agency cited the state's high debt that was racked up by huge amounts of borrowing through the years, as well as the complete depletion of the state's "rainy day fund'' for fiscal emergencies. The state lacks a financial cushion because legislators drained the entire emergency fund to cover budget shortfalls during the recession that became worse with the collapse of the Lehman Brothers investment bank and the resulting...