Fitch Ratings this week downgraded by three notches $19.7 million of sales tax revenue bonds issued by the Gravois Bluffs Transportation Development District. It placed the credit, now at the lowest investment-grade rating of BBB-minus, on rating watch negative.

The district was downgraded to BBB-minus from A-minus on bonds sold in 2007 to refund debt that funded road extensions surrounding the Gravois Bluffs East and West retail centers about 20 miles southwest of St. Louis.

The drop  reflects the increasingly competitive regional retail market and local economic pressures. Long-term pressures include housing market volatility and declines in auto sector employment.

“The rating watch reflects Fitch’s concerns that the continuation of adequate revenue performance and debt service coverage may be threatened, given the mix of pledged revenues, especially in the current economic climate,” analysts wrote.

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