New York, November 21, 2012 --

Moody's Rating

Issue: County Guaranteed Pooled Notes, Series 2012 O; Rating: MIG 1; Sale Amount: $48,240,000; Expected Sale Date: 11/30/2012; Rating Description: Note: Bond Anticipation

Opinion

Moody's Investors Service has assigned a MIG 1 rating to Hudson County Improvement Authority's (NJ) $48.24 million County-Guaranteed Pooled Notes, Series 2012 O. The notes are ultimately secured by the county's unlimited general obligation pledge pursuant to a county guaranty agreement. Concurrently, Moody's has affirmed the Aa3 rating and stable outlook on $391 million of direct Hudson County long-term GO and county-guaranteed debt. Proceeds of the HCIA notes will refund loans to the Township of Weehawken (G.O. rated Baa3; $8.1 million), the Weehawken Parking Authority ($15.75 million); the City of Union City (G.O. rated A3; $11.5 million), the City of Jersey City (A2/positive outlook; $11.2 million), and the Town of West New York ($1.9 million).

SUMMARY RATING RATIONALE

The MIG 1 rating factors in the county's strong long-term credit quality, satisfactory history of market access, and sound mechanics under the county guaranty to allow timely repayment of the new notes at their December 20, 2013 maturity. While the HCIA notes are expected to be repaid from borrower loan repayments, the ultimate security for this issue is derived from Hudson County's absolute and unconditional obligation to cure any deficiency in the Debt Service Fund prior to note maturity, and the authorization to issue county general obligation bonds for this purpose pursuant to a Guaranty Ordinance.

The county's long-term general obligation rating of Aa3 reflects the county's substantial, expanding tax base and a stable financial position. The rating also reflects the county's exposure, through guaranteed debt, to the Town of Harrison's (GO rated Ba2/positive outlook) underperforming development projects as well as to Hudson County Improvement Authority's relatively stressed solid waste system. In addition, the rating considers the county's exposure to short-term market volatility, as county and county-guaranteed short-term notes and bonds, amounting to $449 million, represent nearly half of total outstanding debt and takes the form of maturities ranging from $26 million to $138 million. Future rating reviews will continue to consider the county's ability to maintain its current financial position in light of a risk to fund guaranteed debt service.

The stable outlook reflects our expectation that the county will maintain a stable financial position, supported by conservative budgeting of economically sensitive revenues, ongoing expenditure management and limited reliance on one-time revenue sources, which has resulted in four consecutive years of fund balance growth. The county is relatively well positioned to maintain financial stability in the coming years despite revenue constraints created by a statewide taxlevy limitation, given a favorable geographic location and continued growth of the county's taxable base, which is expected to benefit from future PILOT expirations rendering properties taxable.

STRENGTHS

-Substantial and diverse tax base with favorable location

-Stable, structurally balanced financial operations

-Strong market access CHALLENGES - Above-average debt burden -Significant exposure to county-guaranteed enterprise debt and short-term debt

-Statutory levy cap Outlook The stable outlook reflects our expectation that the county will maintain a stable financial position supported by conservative budgeting of economically sensitive revenues, ongoing expenditure management and limited reliance on one-time revenue sources, which has resulted in four consecutive years of fund balance growth. Despite the risks in its debt profile, the county remains relatively well positioned to maintain financial stability in the coming years, in spite of revenue constraints created by a statewide 2% property tax levy limitation, given a favorable location and continued growth of the county's taxable base which are expected to benefit from future PILOT expirations as properties become taxable.

WHAT COULD CHANGE THE RATING (UP):

-Strong growth in taxable assessed valuation over the medium term

-Increased Current Fund balance

-Increased liquidity

-Decline in amount of county-guaranteed debt

WHAT COULD CHANGE THE RATING (DOWN):

-Failure to pay county-guaranteed debt service payments should the need arise

-Decline in financial position or liquidity

-Failure to achieve market access on notes or restructurings

-Significant growth in the HCIA's debt burden through direct borrowing or county-guaranteed debt

RATING METHODOLOGY

The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

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Josellyn YousefAsst Vice President - Analyst Public Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Vito Galluccio Analyst 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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