The Hilton Baltimore Convention Center Hotel will likely need city funds to help pay debt service for revenue bonds issued by the city — a credit negative for the bonds, Moody’s Investor’s Service said Thursday in a brief report.

The hotel is owned and operated by the nonprofit Baltimore Hotel Corp., which used most of the proceeds of more than $300 million of revenue bonds issued by Baltimore in 2006.

About $289.9 million of the bonds remain outstanding, according to Moody’s and city officials. Moody’s rates the bonds’ senior series Ba1 with a negative outlook.

Baltimore finance director Harry Black told the Baltimore Sun and Moody’s recently that the hotel will likely have to use money from the city’s general fund and feeder funds from the citywide hotel occupancy tax collections to cover debt service payments on the bonds, according to the rating agency.

The need for city funds to make the payments “likely marks the beginning of the hotel’s long-term financial dependence on the city’s general fund,” the ratings agency said in the report.

The hotel opened in August 2008 and has not brought in as much revenue as expected. Its revenue per available room in 2012 was $109.41, a 2% increase from 2011, and far less than the initial projection of $158.88 that was made at the time of the 2006 bond issuance.

The hotel started drawing from its own reserves to make up for revenue shortfalls during the recession, and in 2010, depleted its cash trap fund. It later drew $3.82 million of its operating reserve fund, and it had to use some of its site-specific hotel occupancy tax collections in order to make its 2013 debt payments, Moody’s said.

Stephen M. Kraus, chief of Baltimore’s Bureau of Treasury Management, said the city has not yet determined whether the hotel will have to rely on the city’s general fund in the long run. He noted that the economy could pick up and convention center business could increase.

“I’m not convinced that it’s going to be a long-term dependency,” Kraus said.

Moody’s credit negative declaration doesn’t currently change the hotel’s credit rating or outlook but indicates the impact of the need for city funds as one of many factors affecting the hotel.

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