Standard & Poor's Tuesday dropped its rating on the $709 million issue of Main Street Natural Gas Inc. Series 2008A project gas revenue bonds to default level, following a series of events that could potentially leave bondholders as unsecured creditors in Lehman Brothers Holdings Inc. Chapter 11 bankruptcy proceedings.

Main Street terminated its gas supply contract with Lehman Brothers Commodity Services Inc. earlier this week after LBCS failed to deliver gas for five consecutive days. As a result of the termination, the bonds are subject to a mandatory redemption at the end of the month in a transaction designed to be funded by an early termination payment from Lehman Brothers Commodity Services.

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