MOODY'S DOWNGRADES TO Baa2 FROM Baa1 RATING ON HESPERIA CRA TAX ALLOCATION BONDS; RATINGS ON WATCHLIST FOR POSSIBLE FURTHER DOWNGRADE

Posted on: December 22, 2009, 5:26 pm

NEW YORK, Dec 22, 2009 -- Moody's Investors Service has downgraded to Baa2, from Baa1, Hesperia Community Redevelopment Agency's 2005 Series A and B Tax Allocation Bonds (TABs), and 2007 Series A and B TABs. The 2005 Series A TABs and a portion of the 2007 TABs are secured by a first lien on tax increment revenues generated within the agency's two redevelopment project areas, net of set-aside requirements for low and moderate income housing and revenue sharing payments. The 2005 Series B TABs and a remaining portion of the 2007 TABs are secured by pooled low and moderate income housing set-aside revenues from the same two project areas. The downgrade reflects the significant reduction in coverage of total debt service on the bonds since 2007, a result of the significant assessed valuation contraction that occurred in both project areas. At this time, Moody's has also placed both ratings on Watchlist for possible further downgrade. This reflects the prospect for continued AV reductions in the project areas in 2011 and the currently fairly thin debt service coverage...

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