Standard & Poor’s dropped its rating on Main Street Natural Gas Inc. Series 2008A project gas revenue bonds to default level, The Bond Buyer reported. The newspaper said bondholders could be left as unsecured creditors in Lehman Brothers Holdings Inc. Chapter 11 bankruptcy proceedings.
Yesterday, Fitch Ratings downgraded the bonds to “C” from “CCC,” according to MarketWatch. “This action takes into account Lehman Brothers Commodity Services (LBCS) failure to deliver gas and Main Street’s (Purchaser) exercising of its right to terminate the Gas Purchase Agreement (GPA) yesterday (Monday, Sept. 22, 2008),” the Web site said.
Main Street Natural Gas has three other prepaid gas issues outstanding; two supplied by Merrill Lynch Commodities Inc. and one by JP Morgan Venture Energy Corp., The Bond Buyer reported. Standard & Poor’s said the Merrill Lynch-supplied deals, which are currently rated “A” on developing watch, could be upgraded following the successful acquisition of Merrill Lynch by Bank of America Corp., according to the newspaper.