Moody’s upgrades to Aa1 City of College Station’s, TX GOLT

NEW YORK, May 8, 2018 — Moody’s Investors Service upgrades to Aa1 from Aa2 the City of College Station’s
issuer rating and the rating on $308.7 million in previously issued general obligation limited tax debt. At the
same time, Moody’s assigns an Aa1 rating to the city’s $36.9 million Certificates of Obligation, Series 2018.

RATING RATIONALE
The upgrade to the Aa1 rating reflects the city’s sizeable and growing tax base anchored by Texas A&M
University System’s (Aaa stable) flagship campus, as well as steady and favorable operating performance that
continues to support healthy reserves. Although the city may draw on fund balance in the current year, the
spending is nonrecurring and will leave reserves at a still solid level consistent with Aa1 peers. Finally, the
rating further considers manageable debt and pension burdens and regular support from the city’s strong utility
funds.

The Aa1 limited tax rating is the same as the Moody’s issuer rating. Although the GOLT bonds are not a full
faith and credit pledge, the city has substantial margin under statutory tax rate limitations.

RATING OUTLOOK
Moody’s does not generally assign outlooks to local governments with this amount of debt.

FACTORS THAT COULD LEAD TO AN UPGRADE
– Continued strong economic growth that moderates debt and pension burdens with tax base and revenue
expansion
– Increased reserve position

FACTORS THAT COULD LEAD TO A DOWNGRADE
– Reduction in reserves to a level inconsistent with rating peers
– Economic contraction resulting in tax base loss
– Material growth in the city’s debt or pension burdens

LEGAL SECURITY
The certificates are secured by a direct and continuing annual ad valorem tax, levied on all taxable property
within the limits prescribed by law, and a subordinate lien and pledge of $1,000 of net surplus revenues of the
city’s utility system.

USE OF PROCEEDS
Proceeds from the sale will finance various citywide projects including street and transportation improvements,
public parks improvements, utility system improvements, land for a new fire station, and design of a new city
hall.

PROFILE
The City of College Station is located in Brazos County, in the middle of a triangle bounded by Dallas (A1
stable)/Fort Worth (Aa3 negative), Houston (Aa3 stable) and San Antonio (Aaa stable)/Austin (Aaa stable). The
current estimated population is 117,841.

METHODOLOGY
The principal methodology used in these ratings was US Local Government General Obligation Debt published
in December 2016. Please see the Rating Methodologies page on moodys.com for a copy of this
methodology.