NEW YORK - Moody's Investors Service said it has downgraded to Baa2 from A1 the rating to the Casino Reinvestment Development Authority, N.J.'s $253 million parking fee and Atlantic City fund revenue bonds, Series 2005A and Series 2005B (federally taxable) and assigned a negative outlook.
The bonds are secured by: a senior lien on $2.50 of a statutory $3 fee levied on vehicles parking in the 12 Atlantic City casinos as established by state statute; an additional contractual casino parking fee of $1 levied on vehicles parking at the casinos pursuant to a Parking Fee Agreement with each of the 12 casinos; and Investment Alternative Tax (IAT) obligations scheduled for the Atlantic City Fund (based on the original CRDA Act agreements and pledged to secure the bonds from January 1, 2011 through December 31, 2018) pursuant to individual Donation and Credit Agreements with 11 of the 12 casinos.
The downgrade to the Baa2 rating reflects narrowing debt service coverage resulting from rapidly declining parking fee and IAT revenues, which mirror the deteriorating economic and competitive position of Atlantic City's gaming industry.
The negative outlook reflects Moody's expectation for further declines in revenues securing these bonds as Atlantic City casinos continue to face regional competition.
