Hartford bond insurers hire turnaround expert
Hartford's bond insurers have hired financial advisor Robert Lamb, a veteran of tackling municipal turnaround efforts in Connecticut.
Lamb, founder and president of Fairfield, N.J.-based Lamont Financial Services, was tapped by Build America Mutual and Assured Guaranty Corp. to find solutions for Hartford’s massive debt burden. The two bond insurers combined wrap roughly 80% of Hartford’s general obligation debt, which totaled $683 million in the city's most recent comprehensive annual financial report, for the 2016 fiscal year.
Lamb previously aided financial rescue efforts in Waterbury and West Haven, in which both cities avoiding default with the help of state-appointed financial oversight boards. Gov. Dannel Malloy is proposing a fiscal oversight board for Hartford, which has said it will seek bankruptcy absent sufficient state aid. Connecticut is in the midst of a budget impasse that threatens to delay or slash state aid to municipalities.
“We’re trying to develop municipal solutions for Hartford,” said Lamb. “It’s going to involve a number of players including bondholders and bond insurers.”
Assured and BAM told Hartford city officials last week they were willing to discuss a bond refunding as an alternative to bankruptcy. Hartford Mayor Luke Bronin said in early September that the city could file for bankruptcy within 60 days. He hired law firm Greenberg Traurig LLP in the summer to weigh restructuring options.
“The State of Connecticut has a long track record of working with its municipalities and investors to resolve fiscal distress, which has benefited both the residents and taxpayers of the affected communities and the state as a whole,” said BAM spokesman Michael Stanton. “Bob Lamb has first-hand experience with successful outcomes in Waterbury and West Haven, and we think his advice and ideas will prove valuable to Hartford as well.”
Hartford’s bond rating was slashed last week to CC by S&P Global Ratings and Caa3 by Moody’s Investors Service with both citing default concerns. Connecticut’s capital city owes a $26.9 million debt service payment in late October.
Bronin's press office did not immediately respond for comment on the Lamb hire.