Standard&Poor's Ratings Services lowered the short-term component of its dual rating on Houston's series 2004 B-2 combined utility system first-lien variable-rate demand bonds to 'AAA/A-1' from 'AAA/A-1+' following the substitution of the letter of credit (LOC) provider to Citibank N.A. from BNY Mellon. The long-term component of the dual rating is based on the application of joint criteria, assuming low correlation, where the underlying rating (SPUR) on Houston's combined utility system is 'AA' and the irrevocable direct-pay LOC provided by Citibank N.A. is 'A/A-1'. The long-term component of the rating addresses the likelihood bondholders will receive principal and interest payments when due. The short-term component of our rating is based solely on the short-term rating of Citibank. The
