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Criteria I Governments I U.S. Public Finance: U.S. Local Governments General Obligation Ratings: Methodology And Assumptions 1. Standard&Poor's Ratings Services is updating its methodology and assumptions for assigning issuer credit ratings (ICRs) and issue credit ratings based on general obligation(GO)pledges of local governments in the United States. This update follows our request for comment(RFC), "Request For Comment:U.S. Local Governments: Methodology And Assumptions,"published on March 6, 2012. This update provides additional transparency and comparability to help market participants better understand our approach to assigning local government ratings,to enhance the forward-looking nature of these ratings, and to enable better comparisons between U.S.local government ratings,local government ratings in other countries, and all other ratings. The"Principles of Credit Ratings",published on Feb. 16, 2011,form the basis of this criteria. 2. For the ratings in scope,this criteria supersede the following articles: • GO Debt, Oct. 12, 2006 • Key General Obligation Ratio Credit Ranges—Analysis Vs. Reality,April 2, 2008 • Does Bigger Always Mean Better?Sizing Up The Impact Of Size On Municipal Ratings,April 22, 2008 • Location, Location, Location:What Does It Mean For My Community's Rating?April 22, 2008 3. All capitalized terms are defined in the glossary,section X,paragraphs 90-97. I. SCOPE OF THE CRITERIA 4. The criteria apply to all U.S.local government issuer credit ratings and issue ratings on GO bonds issued by municipal governments that are not special purpose districts. Examples of local government entities in the scope include cities, counties,towns,villages,townships, and boroughs, called municipalities in the criteria. Examples of special purpose districts excluded from the scope include school districts,library districts,park districts, and forest preserve districts, among others. The criteria also do not apply to U.S. states or territories but do apply to the District of Columbia. II. SUMMARY OF CRITERIA UPDATE 5. The criteria use the same major elements as our criteria for rating local and regional governments outside the U.S. (see "Methodology For Rating International Local And Regional Governments",published Sept. 20, 2010). Specifically,the criteria assign ratings based on the assessment and scoring of seven key factors: • Institutional framework; • Economy; • Management; • Budgetary flexibility; • Budgetary performance; WWW.STANDARDANDPOORS.COM/RATINGSDIRECT SEPTEMBER 12,2013 3 1190266 1300881696