Moody's Investors Service said it has downgraded to A2 from A1 the rating on Omaha Convention Hotel Corporation, Neb.'s outstanding revenue debt.
The outlook on the credit has been revised to stable from negative.
The A2 rating and stable outlook applies to $141.3 million in outstanding revenue debt. The debt is secured by net revenuesof the convention hotel and is also backed by the city of Omaha's (Aa2stable) pledge to annually appropriate any debt service shortfall.
The A2 rating reflects the Omaha's backstop pledge to fund any debt service shortfall as well as the city's fundamental credit strengths and challenges, including: its sizable tax base and role as the economic center for the state of Nebraska (Aa2 stable); satisfactory financial position; as well as its substantial long-term liabilities including considerable debt and outsized pension obligations.
The rating additionally reflects the Omaha Convention Hotel Corporation's (OCHC) facility profile, including its full service accommodations and amenities which cater directly to the city's CenturyLink Center convention facility; as well as the hotel's historically narrow net operating revenues which have provided for lean coverage on the outstanding bonds.
Moody's also incorporated adequate legal provisions and the lack of a pledged asset; as well as an escalating debt service schedule.
