S&P dropped the Birmingham series A bonds from BB to B, and the B and C bonds from B to CCC.
Holders of series B and C bonds are most at risk, because they fall second in line to holders of series A bonds when the trustee makes payments.
Dwindling debt reserve is among the several reasons for S&P's downgrade. S&P Credit Analyst Valerie White says "the trustee drew on the debt service reserve funds to meet its January 2002 payments to bondholders."
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