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Moody's Downgrades Texas Municipal Gas Acquisition & Supply Corporation I To A1

Moody's Investors Service has downgraded the rating of Texas Municipal Gas Acquisition & Supply Corporation I, Gas Supply Revenue Bonds, Series 2006A, 2006B and 2008D to A1 from Aa3. The A1 rating remains on watch for further downgrade. The downgrade is a result of the downgrade of Merrill Lynch & Co.'s rating to A1 from Aa3. The A1 rating remains on watch for downgrade due to the investment of funds needed for debt service payments in a guaranteed investment agreement provided by Depfa Bank plc (A2/ P-1 both ratings on watch for downgrade).

The rating on the Bonds is based upon the credit quality of: (i) Merrill Lynch & Co., Inc. (A1) as gas purchase contract guarantor; (ii) BP Corporation North America, Inc. (Aa2) as commodity swap provider; (iii) Merrill Lynch & Co, Inc.
(A1) as interest rate swap provider; and (iv) Depfa Bank plc (A2/ P-1 both ratings on watch for downgrade) as GIC provider. In addition, the Series 2008D bonds are further supported by a Funding Agreement which is guaranteed by Merrill Lynch & Co. which supports participant nonpayment.

The most recent rating action on the bonds was on January 13, 2009 when the rating was upgraded to Aa3 from A2 and placed on watch for downgrade. For more information on the transaction please see Moody's New Issue Report dated December 19, 2006 and Rating Update Report dated July 9, 2008.

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