LOS ANGELES --A ratings downgrade on Huntington Beach, Calif.'s $32.4 million of outstanding tax allocation bonds was triggered this week when it was disclosed that tax increment revenues in a troubled redevelopment project will fall $89,000 short of debt service requirements this year.

Moody's Investors Service lowered its rating on the bonds to a speculative-grade Ba on Tuesday, marking the first time it has assigned a below investment-grade rating to a California tax allocation bond, Moody's assistant vice president Ronald L. Junker said.

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