Rio Nuevo Multipurpose Facs Dist, Ariz., Downgraded to A2 by Moody's

Moody's Investors Service said it has downgraded to A2 from A1 the rating on Rio Nuevo Multipurpose Facilities District (city of Tucson), Ariz.'s subordinate lien excise tax revenue bonds.

The downgrade affects $64.7 million in outstanding bonds.

The bonds are secured by a subordinate lien pledge on the district's incremental state sales tax revenues. The bonds are additionally secured by an intergovernmental agreement with Tucson that provides, in the event there is insufficient pledged revenues to make debt service payments, that Tucson will cure that deficiency, subject to annual appropriation.

A stable outlook has also been assigned.

The downgrade reflects a deteriorating trend of the district's pledged revenues in recent years. The rating also considers the bonds' legal provisions, the existence of a cash-funded debt service reserve, and Tucson's moral obligation pledge to cure a deficiency in pledged revenues to make debt service payments.

The stable outlook reflects Moody's expectation that the city of Tucson will fulfill its moral obligation pledge to cure a deficiency in pledged revenues to make debt service payments.

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