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Rating Action:

Moody's affirms A1 on Las Vegas Convention & Visitors Autority revenue bonds; outlook is stable

Global Credit Research - 17 Jan 2014

$218 million of debt affected

New York, January 17, 2014 -- Moody's Investors Service has affirmed the A1 rating on the Las Vegas Convention and Visitors Authority's (LVCVA) revenue bonds outstanding in the amount of $218.3 million. The bonds are secured by the authority's pledge of net revenues from hotel taxes collected throughout Clark County as well as convention facilities. The bonds are on parity with LVCVA's double-barreled bonds issued through the county that also have the county's GOLT pledge. The authority is a governmental entity separate and apart from Clark County with its own governing board and independent administrative staff.

SUMMARY RATING RATIONALE

The A1 rating primarily reflects the authority's pledge of hotel room taxes and facility charges that are benefitting from a nascent recovery in the Las Vegas metro area's cyclical and tourism dependent economy. The rating incorporates the authority's pledge of economically-sensitive revenues that demonstrate a trend of long-term growth but nevertheless declined significantly in the recent recession. Nevertheless, LVCVA's net pledged revenues continue to provide solid coverage of peak debt service requirements for the authority's revenue and double-barreled debt. Additionally, legal provisions are satisfactory.

The stable outlook on LVCVA reflects Moody's expectation that the economy of the Las Vegas metro area will continue to improve at a moderate pace and remain dependent on cyclical tourism activity. Recovery is expected to directly benefit the authority's pledged revenues as visitor volumes and room rates slowly improve. The authority also benefits from multi-year commitments for many conventions and trade shows that will directly support pledged revenues. We also expect that management will remain committed to its goal of maintaining at least 3.0 times coverage of annual debt service, despite near-tem capital plans.

STRENGTHS

- Las Vegas (Aa2 GOLT/stable) area features many tourist attractions that lure events and visitors

- Modestly paced rebound in visitor volumes and related consumer spending following recession

- Substantial declines in hotel taxes in recent recession

- Very strong hotel occupancy rates relative to the U.S.

- Satisfactory legal provisions

CHALLENGES

- Pledged revenues reliant on cyclical tourism and convention related activities

- Economically sensitive hotel revenues still below pre-recession levels

- Global competition from other tourism and convention destinations

WHAT COULD MAKE THE RATING GO UP

- Sustainable and significant growth in pledged revenues

- Reduced cyclical volatility in pledged receipts over the long-term

WHAT COULD MAKE THE RATING GO DOWN

- Unexpected weakness in pledge revenue trends

- Substantial additional debt issuances that significantly reduce debt service coverage

The principal methodology used in this rating was US Public Finance Special Tax Methodology published in March 2012. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Patrick Raymond Liberatore
Analyst
Public Finance Group
Moody's Investors Service, Inc.
One Front Street
Suite 1900
San Francisco, CA 94111
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

William Oh
Analyst
Public Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's affirms A1 on Las Vegas Convention & Visitors Autority revenue bonds; outlook is stable
No Related Data.

 

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