OREANDA-NEWS. On the effective date of Feb. 20, 2015, Fitch Ratings will confirm the short-term 'F1' rating assigned to the \$75,000,000 City of Houston, Texas General Obligation commercial paper notes series G-1 (notes). A maximum of \$75,000,000 aggregate principal amount of authorized notes may be outstanding at any given time.

The rating action is in connection with (i) the substitution of the current liquidity facility issued in the form of a Standby Letter of Credit and Reimbursement Agreement provided by Comerica Bank (rated 'A/F1'; Stable Outlook by Fitch) supporting the notes, with a liquidity facility in the form of a credit agreement to be provided by Mizuho Bank, LTD (Mizuho, rated 'A-/F1'; Stable Outlook) and (ii) the reoffering of the notes.

KEY RATING DRIVERS

On the effective date, the 'F1' rating on the notes will be confirmed based on the support of a substitute liquidity facility to be provided by Mizuho. The Mizuho substitute liquidity facility provides coverage for the principal amount and interest on the maturity dates of the notes.

The short-term rating on the notes will expire on the earlier of Feb. 19, 2018, the expiration date of the substitute liquidity facility, unless such date is extended, or upon any prior termination of the substitute liquidity facility.

U.S. Bank National Association acting as Issuing and Paying Agent (IPA) will continue as the Issuing and Paying Agent for the notes, and as IPA, is directed to request an advance under the substitute liquidity facility whenever proceeds of the sale of rollover notes and other funds of the City of Houston are insufficient to pay maturing notes. The substitute liquidity facility provides sufficient coverage for the principal amount of notes and 270 days of interest calculated at 10% based upon a 365 day year.

All notes will be issued at par, with interest due at maturity. Following the occurrence of an event of default under the liquidity facility, Mizuho may direct the IPA to immediately stop the issuance of any additional notes. In such event, the substitute liquidity facility will expire after all the notes supported by such liquidity facility mature and have been paid from funds drawn on the substitute liquidity facility. In addition, the substitute liquidity facility may be terminated by Mizuho upon the occurrence of specified immediate termination events. The dealers for the notes are Samuel A, Ramirez & Co., Loop Capital Markets and The Williams Capital Group.

RATING SENSITIVITIES

The rating reflects the short-term rating that Fitch maintains on the substitute bank providing liquidity support and will be adjusted upward or downward in conjunction with changes to the short-term rating of the bank and in some cases, the long-term rating of City of Houston.