New York, December 07, 2012 --

Moody's Ratings

Issue: Utility System Junior Lien Revenue and Refunding Bonds, Series 2012; Rating: A1; Sale Amount: $154,895,000; Expected Sale Date: 12-18-2012; Rating Description: Revenue: Government Enterprise

Issue: Utility System Junior Lien Revenue Bonds, Series 2012; Rating: A1; Sale Amount: $68,565,000; Expected Sale Date: 12-18-2012; Rating Description: Revenue: Government Enterprise

Opinion

Moody's Investors Service has assigned an initial A1 rating to the City of Corpus Christi's (TX) $154.9 million Utility System Junior Lien Revenue and Refunding Bonds, Series 2012 and $68.6 million Utility System Junior Lien Revenue Bonds, Series 2012 . Concurrently, Moody's has affirmed the Aa3 rating on the system's $383.7 million of outstanding prior lien debt that will remain post refunding.

SUMMARY RATING RATIONALE

The bonds are secured by a second lien on the net revenues of the system and while outstanding debt is secured by a prior lien on the net revenues of the system. The ratings reflect a stable and growing service area, large financial operations supporting adequate debt service coverage, and plans for debt that will require future rate increases to maintain historical coverage. The ratings also incorporates somewhat weaker net working capital and days of cash on hand given that the system uses excess cash to fund one time capital needs. However, the management team is strong which is demonstrated in long term financial forecasts and a ten year capital improvement plan (CIP). The Aa3 rating on the prior lien reflects the first lien of system net revenues while the A1 rating on the junior lien reflects the second lien on system net revenues and corresponding satisfactory legal provisions.

STRENGTHS

-Consistent and stable system growth

-Trend of satisfactory debt service coverage

-Long term planning for both financial operations and debt requirements

CHALLENGES

-Ongoing debt needs associated with large Sanitary Sewer Overflow program

-Council approval on rate increases will be necessary to support future debt

-Modest net working capital compared to other highly rated systems

WHAT COULD MAKE THE RATING GO UP

Improvement in liquidity of the system

Strengthened debt service coverage

WHAT COULD MAKE THE RATING GO DOWN

Use of reserves weakening the liquidity of the system

Trend of narrow debt service coverage

RATING METHODOLOGY

The principal methodology used in this rating was Analytical Framework For Water And Sewer System Ratings published in August 1999. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

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Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

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Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

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Kristin Button Vice President - Senior Analyst Public Finance Group Moody'sInvestors Service, Inc.600 North Pearl Street Suite 2165 Dallas, TX 75201 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Edward Damutz VP - Senior Credit Officer Public Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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