Main Street Natural Gas Bonds

The Main Street Natural Gas, Inc. (“Main Street”) Gas Project Revenue Bonds, Series 2008A, which were “investment grade” rated when purchased, appear subject to the bankruptcy of Lehman Brothers Holdings, Inc. (“LBHI”). While LBHI did not guarantee these bonds, it did guarantee certain payment obligations of the gas supplier, Lehman Brothers Commodity Services, Inc. (“LBCS”), in the event of failure to deliver gas to Main Street for sale to the City of Tallahassee or the Municipal Gas Authority of Georgia, which failure has occurred according to published reports.

Institutional bondholders holding a substantial amount of these bonds have filed, in the Bankruptcy Court, a limited objection and reservation of rights as to the sale of assets of LBHI to Barclays Capital, Inc. (“Barclays”), asserting that the documents related to the sale fail to adequately identify whether the assets of LBCS are included or implicated by the sale to Barclays, and thus leave unclear the impact the sale may have on LBHI’s ability to satisfy its obligations under its gas contract with Main Street.

It has also been reported, in a publication by Bankruptcy Creditors’ Service Inc., that Main Street has expressed concern whether its gas contract with LBHI is among those contracts that would be assumed and assigned to Barclays, because the documents which have been filed with the Bankruptcy Court do not “adequately identify” which assets are among those to be sold.

The Main Street bond issue referred to above has the following identification:

Main Street Natural Gas, Inc.
Gas Project Revenue Bonds, Series 2008A

Issue Maturity CUSIP
7/15/17 56036YED3
7/15/22 56036YEE1
7/15/28 56036YEF8
7/15/33 56036YEG6
7/15/38 56036YEH4