The recent downgrade by Standard & Poor's Corp. of Citibank's claims-paying ability triggered a two-notch demotion of 48 municipal issues backed by the bank's letters of credit, for a total of $3.72 billion in municipal issues affected.

Citibank last week lowered the bank's letter-of credit, certificate-of-deposit, and deposit-note programs to A, from AA-minus, because of its inability to raise asset levels quickly enough, according to Tanya Azarch, vice president at the rating agency.

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