Moody's Investors Service downgraded Atlantic City parking fee and Atlantic City fund revenue bonds, series 2005A and 2005B, to Ba3 from Baa3 on Oct. 15.
The three-notch downgrade affects $194.6 million of outstanding bonds, according to Moody's analyst Josellyn Yousef. Moody's retains a negative outlook on the bonds.
The bonds are secured by pledges of parking fees levied on vehicles in Atlantic City and a portion of the gross revenue tax levied on casinos through 2018.
"The Ba3 rating reflects our expectation that debt service coverage will fall below 1.0 times annual debt service within two years," Yousef said.