Moody's Investors Service has upgraded to Aa2 from Aa3 the long-term joint support letter of credit (LOC)-backed ratings of the City of Philadelphia, Pennsylvania Gas Works (PGW) Revenue Refunding Bonds, Eighth Series C and E (1998 General Ordinance) (collectively, the Bonds).

RATINGS RATIONALE

Moody's review of the long-term joint default analysis (JDA) ratings of the Bonds resulted from Moody's upgrade of the underlying rating assigned to the Bonds on July 28, 2017, to A3 from Baa1. For more information on that rating action please see the rating update report published on such date.

The Eighth Series C Bonds are supported by an LOC provided by Barclays Bank PLC (Barclays). The Eighth Series E Bonds are supported by an LOC provided by PNC Bank, N.A. (PNC and, together with Barclays, the Banks).

The long-term LOC-backed ratings of the Bonds continue to be based on JDA reflecting Moody's approach to rating jointly supported transactions. The JDA ratings are based upon (a) the long-term Counterparty Risk Assessment (CR Assessment) of the Banks providing the LOCs, (b) the underlying rating of the Bonds, and (c) the structure and legal protections of the transactions which provide for timely debt service payments to investors.

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