Holders of first-tier debt issued for the Las Vegas Monorail have nothing to show for their most recent scheduled interest payment.
The July 1 payment default on $9.6 million in interest was entirely expected. The nonprofit organization that owns the monorail filed for Chapter 11 bankruptcy in January, in the face of ridership and revenue numbers that leave it nowhere near able to pay its debt service on more than $600 million of revenue bonds issued to finance construction of the four-mile line.
The insurer of the first-tier bonds, Ambac Assurance, has problems of its own. The Wisconsin insurance commissioner’s office responded in March by placing what it deemed to be $35 billion of Ambac’s most toxic holdings in a segregated account administered by his office.
The monorail bonds are the only municipal debt in the segregated account, which is not paying claims while the regulator puts together a workout.
As a result, monorail bond trustee Wells Fargo reported last week in a filing with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access website that bondholders got nothing for their scheduled July 1 interest payment.
Because of the payment default, Fitch Ratings Friday withdrew its rating of the monorail’s first-tier bonds, which had been rated at D.
Moody’s Investors Service had withdrawn its rating in June.
The bonds were issued in 2000, using the Nevada Department of Business and Industry as conduit issuer.
