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.

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