By most measures the wealthiest of states, Connecticut has faced significant economic challenges in the post-recession period, Janney Capital Markets said in a special report on the state's debt.

"Due to diversification considerations and despite beneficial tax treatment of interest on Connecticut bonds for Connecticut residents, we recommend that no more than 50% of a municipal bond portfolio consist of bonds from a single state," Philadelphia-based Janney said in the report, authored by managing director Alan Schankel.

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