Investors Beware as Gas Prepayment Bonds Downgraded by Moody

by InvestorLawyers on August 29, 2012

in Bonds,Charles Schwab,Citigroup,FINRA,Goldman Sachs,J.P. Morgan,Lehman Brothers,Merrill Lynch,Morgan Stanley,Securities Fraud,Suitability

As a significant number of gas prepayment bonds ratings have been downgraded by Moody’s Investors Service, stock fraud lawyers are advising investors to be cautious regarding their investments in these bonds. As a result of downgrades in Goldman Sachs Group Inc., Citigroup Inc., JPMorgan Chase & Co., Credit Agricole Corporate & Investment Bank, Merrill Lynch & Co., BNP Paribas, Morgan Stanley, Royal Bank of Canada and Societe Generale, numerous bonds became subject to review and subsequent downgrades.

Investors Beware as Gas Prepayment Bonds Downgraded by Moody

Securities arbitration lawyers say this situation is similar in some ways to what happened when, after Lehman declared bankruptcy, Series 2008A of Main Street Natural Gas Inc. Gas Project Revenue Bonds were downgraded. In the case of the Lehman bonds, the bonds were not guaranteed by Lehman Brothers, though certain payment obligations of the gas supplier were guaranteed.

The following is a list of gas prepayment bonds that have been affected by downgrades:

  • Tennessee Energy Acquisition Corporation Gas Project Revenue Bonds, Series 2006A
  • Public Energy Authority of Kentucky Inc. Variable Rate Gas Supply Revenue bonds, Series 2006A
  • New Mexico Municipal Energy Acquisition Authority Gas Supply Variable Rate Revenue Bonds, Series 2009
  • American Municipal Power Inc., OH Electricity Purchase Revenue Bonds, 2007A
  • Lancaster Port Authority Gas Supply Variable Rate Revenue Bonds, Series 2008
  • Salt Verde Financial Corporation, AZ Senior Gas Revenue Bonds, 2007
  • Central Plains Energy Project Gas Project Variable Rate Revenue Bonds (Project No. 2), Series 2009
  • Main Street Natural Gas Inc. Gas Project Variable Rate Revenue Bonds, Series 2010
  • Texas Municipal Gas Acquisition & Supply Corporation II Gas Supply Revenue Bonds, Series 2007A & 2007B
  • California Statewide Communities Development Authority Gas Supply Revenue Bonds, Series 2010
  • Municipal Energy Acquisition Corp. Gas Revenue Bonds, Series 2006A & 2006B
  • Indiana Bond Bank Gas Revenue Bonds, 2007
  • Northern California Gas Authority No. 1 Gas Project Revenue Bonds, Series 2007A & 2007B
  • Main Street Natural Gas Inc. Gas Project Revenue Bonds, Series 2006A & 2006B
  • Roseville Natural Gas Financing Authority, CA Gas Prepayment Revenue Bonds, Series 2007A
  • Public Authority for Colorado Energy Natural Gas Purchase Revenue Bonds, Series 2008
  • Main Street Natural Gas Inc. Gas Project Revenue Bonds, Series 2007A
  • Long Beach Bond Finance Authority Natural Gas Purchase Revenue Bonds, Series 2007A & 2007B
  • Natural Gas Acquisition Corporation of the City of Clarksville, TN Gas Revenue Bonds, Series 2006
  • Texas Municipal Gas Acquisition & Supply Corporation I, Gas Supply Revenue Bonds, Series 2006A & 2006B
  • Texas Municipal Gas Acquisition & Supply Corporation I, Gas Supply Revenue Bonds, Series 2008D
  • Black Belt Energy Gas District Gas Project Revenue Bonds, Series 2012A
  • Central Plains Energy Project Gas Project Revenue Bonds (Project No. 3), Series 2012

According to stock fraud lawyers, the profitability and yield of investor holdings may be impacted by the downgrades placed on these investments. Furthermore, if the gas supplier guarantor’s credit risk was not disclosed, or if the bonds were recommended as “safe,” investors may be able to recover losses through securities arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

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