Las Vegas Monorail debt service payment shortfall prompts revenue bond default

By Caroline Salls

Pittsburgh, Feb. 11 - Las Vegas Monorail Co. is in default on the Director of the State of Nevada Department of Business and Industry's Las Vegas Monorail Project first-tier series 2000 and second-tier series 2000 revenue bonds after it failed to make required December and January debt service funding payments.

According to a notice to bondholders from trustee Wells Fargo Bank, NA, the bank was forced to withdraw $1.62 million from the first-tier bond debt service reserve fund and $762,896 from the second-tier bond debt service reserve fund to make December principal and interest payments on the bonds.

Wells Fargo said it received a total of $3.62 million in total monthly revenue from Las Vegas Monorail in January, well short of the $6.01 million in revenues due for the month.

In December, the trustee said it received a total of $3.76 million in revenues, compared with a $3.84 million required payment.

The insufficient January debt service payment prompted the default.

In addition, the trustee said Moody's Investors Service downgraded the underlying rating on Las Vegas Monorail's first-tier revenue bonds to Caa2 from B3, and the bonds covered by a bond insurance program, which are still rated Aaa, remain on review for possible downgrade.

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