Moody’s Investors Service Tuesday downgraded the underlying rating on bonds issued for the Las Vegas Monorail Corp. to Caa2 from B2, stating that the monorail faces a payment default by 2010 under current trends,

The action affects first-tier project revenue bonds issued in 2000 through the Nevada Department of Business and Industry. Ambac Assurance Corp. wrapped the first-tier bonds. Ambac’s Aaa Moody’s rating is on review for a possible downgrade. It has been downgraded to AA by Fitch Ratings.

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