Investors Service Downgrades Reno Bond Rating

By: Associated Press
By: Associated Press

RENO, Nev. (AP) - Moody's Investors Service has downgraded its rating for an $8.1 million bond the city of Reno used to finance part of the downtown railroad trench to just a step above "junk" status.

The Reno Gazette-Journal reports Moody's dropped the rating from A3 to Baa3 on Monday because of shortfalls in the 1 percent hotel room tax created to pay off the debt for the nearly $200 million project.

The new rating means it's a speculative investment.

The bond was issued in 2006 to finance a 30-year federal loan.

Downtown room tax collections have fallen 40 percent since 2006.

Moody's says the negative outlook "reflects expectations that pledged revenues will remain challenged over the medium-term."

It notes the city has access to multiple reserve funds to continue making payments.

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