Moody's Investors Service last week lowered its rating on Omaha's special tax revenue bonds to Aa2 from Aa1 following its downgrade of the city's general obligation rating to Aa1 from Aaa last month.

The newest downgrade affects $43.1 million of special tax revenue bonds, according to Moody's, including $13.5 million of refunding redevelopment bonds the city is expected to price this week.

Proceeds from the issue will be used to advance refund 2004 bonds that were originally issued to finance construction of a performing arts complex.

The debt is secured by a special property-tax redevelopment levy that is capped at 2.6 cents per $100 of full market value, according to Moody's. The city currently levies 1.59 cents per $100 of full market value.

The downgrade of the special tax revenue reflects the downgrade of the city's GO debt, the rating agency said. Moody's cut its rating on Omaha in late September, causing it to lose one of its prized triple-A ratings, citing mounting employee retirement liabilities.

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