Sheraton Phoenix bonds attract only so-so rating

[Source: Russ Wiles, Arizona Republic] — The new high-rise hotel taking shape in downtown Phoenix has received a so-so rating on its bonds.  Moody’s Investors Service has assigned a Baa3 grade to $157 million in senior revenue bonds issued by the city’s Downtown Phoenix Hotel Corp. to build and furnish the 1,000-room Sheraton Phoenix Downtown Hotel, north of the convention center.  “The assignment of the low investment-grade rating to the senior bonds reflects the competitive nature of the hotel industry coupled with its demonstrated vulnerability to economic cycles as well as the limited performance history of publicly financed hotel projects,” Moody’s said in a report.

An additional $193 million in revenue bonds attached to the project received a higher A2 rating from Moody’s.  They’re backed by hotel revenues and city sports-facilities taxes.

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