Jefferson County, Ala., Warrants Lowered to D by S&P

Standard & Poor's Ratings Services said it lowered its rating on Jefferson County, Ala.'s series 2004A, 2005A-1, 2005A-2, 2005A-3, 2005A-4, and 2005B warrants to D from B.

"We believe there was a distressed exchange between the county and its creditors for these warrants and that the county did not honor its original agreement to warrant holders," said Standard & Poor's credit analyst Brian Marshall. In our view, the distressed exchange occurred when the county emerged from bankruptcy on Dec. 3, 2013. At that time, the series 2004A and multiple series 2005A and 2005B warrants became governed by a materially different indenture, with reduced payments to bondholders.

The modifications made to the indenture create materially different obligations from the debt rated under the prior indenture, the agency said. The county's current 2004A, 2005A1-4, and 2005B warrants under the post-bankruptcy indenture are not currently rated by Standard & Poor's.

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