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Breaking News
Jun. 22, 2009
Copyright © Las Vegas Review-Journal

Fitch cuts credit rating of Las Vegas Monorail bonds

BLOOMBERG NEWS

About $450 million of municipal bonds that helped finance the Las Vegas Monorail had their credit rating cut to C from CC by Fitch Ratings, implying that “default of some kind appears imminent or inevitable.”

The July 2009 debt service payment will probably be drawn from a surety bond provided by Ambac Assurance Corp. for the reserve fund on the first-tier debt, the rating company said in a news release today from New York.

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    • “In the event that there is a performance issue on the Ambac surety, funds will likely be insufficient to make the next first-tier debt service payment,” Fitch said.

    Las Vegas Monorail Co., nonprofit operator of the 3.9-mile (6.3-kilometer) elevated train line, has drawn on cash reserves to make debt payments since January 2008 amid lower-than- expected fare revenue, Fitch said. Daily average ridership on the seven-stop monorail fell almost 24 percent during the first five months of year, as the price of an unlimited day pass was raised by a dollar to $13 and the recession led fewer people to visit Las Vegas.

    Nevada Department of Business and Industry 5 3/8 percent bonds due in 2040 and backed by a first-tier lien of monorail revenue traded between dealers last week at 53 cents on the dollar, Municipal Securities Rulemaking Board data show. The securities have traded in the past 12 months as low as 11 cents and as high as 79 cents. They were issued in 2000 at 93.6 cents.

    Fitch’s C rating on the debt is 11 levels below investment grade. The company does not rate $149 million of bonds that have a second-tier lien or $49 million of third-tier securities.

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    James wrote on June 23, 2009 07:18 AM: The monorail has been "dead" for over a year now, only existing to finance some overpaid executives who still make 6 figures only to drive it into the ground. That's sad.


    Nevadan At Heart wrote on June 23, 2009 01:53 AM: As mentioned and cited before construction had begun on the monorail: http://www.youtube.com/watch?v=A3xGtjhZ_Yg


    Dave wrote on June 22, 2009 11:10 PM: We all knew this monorail was going fail from the start, right? 1/2 billion in bonds plus operating expenses for a 3.5 mile track. LOL. I mean "really" !!!
    Well, I'm sure Harry and Obamas's train to Victorville will "fare" much better !


    jl wrote on June 22, 2009 10:08 PM: what a waste of money just like the fremont canopy....


    Sam wrote on June 22, 2009 09:29 PM: Stupid, stupid, stupid...

    This casino linking monorail should be free of charge. It should also be extended to the airport.


    woodbury toll road will offset the bombadere repair costs wrote on June 22, 2009 09:01 PM:
    and then you need a perkins rfid card to board each rail car.































    $ound$ like a great idea for the profiteer


    only vegas wrote on June 22, 2009 07:56 PM: Lets charge $13 for a ticket and we would only need 250,000 a day or we could sell $3 tickets and have 1.5 million per day ridership? Lets see here, I went business scholl and got my BA & MBA or is it MBA & BA or was it dumb a. Lets charge more for less. Only Vegas?


    2zero wrote on June 22, 2009 07:09 PM: Thank you Sig Rogich and Randy Walker sons!


    v egas wrote on June 22, 2009 05:50 PM: Right, and light rail from california to vegas will make a profit????


    Scott Miller wrote on June 22, 2009 05:16 PM: Why isn't a local reporter covering this? The monorail is right here, why did the RJ print a Bloomberg report?


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