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The following is a press release from Moody's Investors Service: $200 MILLION IN NOTES AFFECTED. LETTERS OF CREDIT PROVIDED BY BARCLAYS BANK PLC (FOR SERIES B-4) & CITIBANK, N.A. (FOR SERIES B-6) Houston (City of) TX Texas Moody's Rating Issue Rating Ser. B-4 P-1 Sale Amount $100,000,000 Expected Sale Date 07/21/10 Rating Description Letter of Credit- Direct Pay Ser. B-6 P-1 Sale Amount $100,000,000 Expected Sale Date 07/21/10 Rating Description Letter of Credit- Direct Pay NEW YORK, July 22, 2010 -- Corrections: All references in the headline, subheadline and text to Series B-5 and the associated letter of credit were deleted as the transaction was cancelled. Subheadline was changed to $200 million. Under the section titled LETTERS OF CREDIT: the letter of credit expiration date was changed to July 15, 2013 and the letter of credit draw time and time by which the bank honors the draw were changed to 11:00 a.m. and 2:00 p.m., respectively. Revised release follows. Moody's Investors Service has assigned ratings of P-1 to the City of Houston, Texas, Combined Utility System Commercial Paper Notes, Series B-4 & B-6 (the Notes). The ratings on the Notes are based upon the letters of credit provided by Barclays Bank plc for Series B-4 and Citibank, N.A. for Series B-6; the structure and legal protections of the transaction, which ensures timely payment of principal and interest to Noteholders; and Moody's evaluation of the credit quality of the banks issuing the letters of credit. Moody's currently rates Barclays Bank plc Aa3 for long-term deposits and P-1 for short-term deposits. Moody's currently rates Citibank, N.A. A1 for long-term obligations and P-1 for short-term obligations. THE NOTES The Ordinance 2009-1118 authorizes the issuance of the Notes that will be issued on an interest-bearing basis only. The Ordinance authorizes the issuance of $700 million of Notes (for Series B1 through B-6) however the issuance for each series may not exceed the stated amount of the applicable letter of credit. The letters of credit for Series B-4 and B-6 are each sized for $100 principal plus 270 days' interest at the maximum rate, 10%. The Issuing and Paying Agent, U.S. Bank National Association, (the IPA) will issue notes upon receipt of issuance instructions from the City. Each note will be of a denomination equal to or greater than $100,000; will mature no later than 270 days after issuance; will mature no later than the business day prior to the expiration date of the applicable letter of credit; will mature no later than December 15, 2039; and will not cause the principal amount outstanding and interest on the Notes for each series to exceed the stated amount provided for under the applicable letter of credit for each series. Barclays Capital, Inc., Citigroup Global Markets, J.P. Morgan Securities, Ramirez & Co. Inc. and Rice Financial Products will be the dealers for the Notes. Pursuant to the Issuing and Paying Agent Agreement, IPA shall draw on the applicable letter of credit no later than 9:00 a.m. New York time on each commercial paper maturity date. Additionally, upon the receipt of a Final Drawing Notice from the applicable letter of credit bank, the IPA is directed to draw no later than 10 calendar days following receipt of such notice for full principal and interest to the maturity date on all outstanding Notes. The letter of credit banks will be reimbursed for each draw with the proceeds from the sale of rollover Notes, or with funds from the City. Substitution of the letters of credit are permitted. No Notes may be issued that mature later than one business day prior to the substitution date. LETTERS OF CREDIT Each letter of credit is sized to cover to cover $100 million in principal. Additionally, each letter of credit covers 270 days of interest at a maximum rate of 10%. The principal amount of the Notes outstanding under each subseries cannot exceed the amount available under the applicable letter of credit. Conforming draws for the payment of principal and interest received by each letter of credit bank before 11:00 a.m., New York time, on a business day, will be honored by 2:00 p.m., New York time, on the same day. Drawings for payments on each letter of credit will be reinstated upon receipt by the applicable letter of credit bank of reimbursement proceeds from the IPA. Upon an event of default under the respective reimbursement agreement, the applicable letter of credit bank may send notice of No-Issuance or Final Drawing. Upon receipt of the Final Drawing Notice, the IPA will cease to issue any additional Notes and will draw on the applicable letter of credit for an amount sufficient to provide for payment of principal for all outstanding Notes and interest to accrue to the maturity date of the Notes. Upon the receipt of a No-Issuance Notice, the IPA shall cease issuing Notes upon receipt of such notice and the trustee will continue to draw on the applicable letter of credit as Notes becomes due. Each letter of credit shall terminate at 4:00 p.m. New York time upon the earliest to occur of: (i) July 15, 2013; (ii) the later of the date on which the Bank receives written notice from the IPA that an alternate letter of credit has been substituted for the letter of credit or the effective date of the substitute letter of credit (provided all draws have been honored); (iii) the date the Bank receives notice from the IPA that no Notes remain outstanding (other than Notes secured by an alternate letter of credit) and the IPA elects to terminate the letter of credit; or (iv) the earlier of: (a) the 15th calendar day after the date the IPA receives notice from the Bank of a Final Drawing Notice or (b) the date on which a drawing resulting from the IPA's receipt of such Final Drawing Notice is honored. Each letter of credit is governed and construed in accordance with the International Standby Practices (ISP98). WHAT COULD CHANGE THE RATINGS - UP Not applicable. WHAT COULD CHANGE THE RATINGS - DOWN The rating on the Series B-4 Notes would be lowered if the short-term deposit rating on Barclays Bank plc was downgraded. The rating on the Series B-6 Notes would be lowered if the short-term other senior obligation (OSO) rating on Citibank, N.A. was downgraded. METHODOLOGY The principal methodology used in rating this transaction was Moody's Rating Methodology on Letter of Credit Supported Municipal Commercial Paper Transactions published December 1, 2008, and available on www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website KEY CONTACTS Commercial Paper Dealers: Barclays Capital, Inc., Citigroup Global Markets, J.P. Morgan Securities, Ramirez & Co. Inc. and Rice Financial Products Issuing and Paying Agent: US Bank National Association ANALYSTS: Robert Azrin, Analyst, Public Finance Group, Moody's Investors Service Michael J. Loughlin, Senior Credit Officer, Public Finance Group, Moody's Investors Service CONTACTS: Journalists: (212) 553-0376 Research Clients: (212) 553-1653 Copyright 2010 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved. CREDIT RATINGS ARE MOODY'S INVESTORS SERVICE, INC.'S ("MIS") CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MIS DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS DO NOT CONSTITUTE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS ARE NOT RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. CREDIT RATINGS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MIS ISSUES ITS CREDIT RATINGS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from reliable sources; however, MOODY'S does not and cannot in every instance independently verify, audit or validate information received in the rating process. Under no circumstances shall MOODY'S have any liability to any person (MORE TO FOLLOW) Dow Jones Newswires July 22, 2010 10:36 ET (14:36 GMT)