INVITATION TO TENDER BONDS for Purchase

made by
PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO

1.   INTRODUCTION

a. General

This Invitation to Tender Bonds for Purchase, dated March 17, 2025 (as it may be amended or supplemented, including the cover page, inside cover pages and Appendix A, this "Invitation"), is made by the Public Utilities Commission of the City and County of San Francisco (the "Commission"), with the assistance of Jefferies LLC, as Dealer Manager (the "Dealer Manager"), to the beneficial owners (the "Bondholders") of certain maturities of the Commission's San Francisco Water Revenue Bonds with the following designations (collectively the "Target Bonds"):

•   2019 Series ABC, 2019 Sub-Series A (Refunding - Federally Taxable) (WSIP) (Green Bonds) (the "2019A Bonds");

•   2019 Series ABC, 2019 Sub-Series B (Refunding - Federally Taxable) (Hetch Hetchy) (the "2019B Bonds");

•   2019 Series ABC, 2019 Sub-Series C (Refunding - Federally Taxable) (Local Water Main) (the "2019C Bonds");

•   2020 Series EFGH, 2020 Sub-Series E (Refunding - Federally Taxable) (WSIP) (Green Bonds) (the "2020E Bonds");

•   2020 Series EFGH, 2020 Sub-Series F (Refunding - Federally Taxable) (Non-WSIP) (the "2020F Bonds");

•   2020 Series EFGH, 2020 Sub-Series G (Refunding - Federally Taxable) (Local Water) (the "2020G Bonds");

•   2020 Series EFGH, 2020 Sub-Series H (Refunding - Federally Taxable) (Hetch Hetchy Water) (the "2020H Bonds" and, together with the 2019A Bonds, the 2019B Bonds, the 2019C Bonds, the 2020E Bonds, the 2020F Bonds and the 2020G Bonds, the "Taxable Target Bonds");

•   2016 Series AB, 2016 Sub-Series A (Refunding) (the "2016A Bonds"); and

•   2017 Series DEFG, 2017 Sub-Series D (Refunding) (Green Bonds) (the "2017D Bonds" and, together with the 2016A Bonds, the "Tax-Exempt Target Bonds"),

maturing on the dates set forth in the tables on pages (i) through (iii) of this Invitation.  The Commission is inviting the Bondholders of the Target Bonds of each CUSIP noted on the inside cover pages hereof to tender all or a portion of their Target Bonds for cash purchase on the Settlement Date (as defined herein) by the Commission at the applicable price (each an "Offer Purchase Price" and, collectively, the "Offer Purchase Prices") to be determined as follows:

•   With respect to each CUSIP of the Taxable Target Bonds, each Offer Purchase Price will be based on a yield (each a "Purchase Yield") equal to the applicable fixed spread (each, a "Fixed Spread") to be set forth in the Pricing Notice, which is expected to be dated on or about March 24, 2025 (as may be amended and supplemented, the "Pricing Notice," a form of which is attached hereto as Appendix B) to be added to the yield on the relevant benchmark United States Treasury Security (the "Benchmark U.S. Treasury Security").  See Section 2(j), "TERMS OF THIS INVITATION - Determination of Offer Purchase Prices - Taxable Target Bonds" herein; and

•   With respect to each CUSIP of the Tax-Exempt Target Bonds, each Offer Purchase Price will be set forth in the Pricing Notice.  See Section 2(j), "TERMS OF THIS INVITATION - Determination of Offer Purchase Prices - Tax-Exempt Target Bonds" herein.

In addition, accrued interest on such purchased Target Bonds will be paid up to but not including the Settlement Date (as defined herein) ("Accrued Interest"), all on the terms and conditions as set forth in this Invitation. 

The purchase of any Target Bonds pursuant to this Invitation is contingent on the Commission receiving sufficient net proceeds from the issuance of its San Francisco Water Revenue Bonds, 2025 Series ABC, 2025 Sub-Series A (Refunding) (WSIP) (Green Bonds), 2025 Sub-Series B (Refunding) (Regional Water and Local Water) and 2025 Sub-Series C (Refunding) (Hetch Hetchy Water) (collectively, the "2025 Refunding Bonds") (see "- Sources of Funds to Purchase Target Bonds" herein) and is also subject to the terms of this Invitation and certain other conditions as described herein, including satisfaction of the Financing Conditions (as defined herein).  The Commission's obligation to accept for purchase and to pay for Target Bonds validly tendered (and not withdrawn) pursuant to this Invitation is also subject to the satisfaction or waiver of certain conditions.  See Section 2(q), "TERMS OF THIS INVITATION - Conditions to Purchase," for additional information regarding certain of such conditions.

The Target Bonds, if any, that the Commission decides to purchase will be purchased on April 17, 2025, unless such date is extended by the Commission, assuming all conditions to the Invitation have then been satisfied or waived by the Commission (such date being the "Settlement Date").  The purchase price paid for each offer of Target Bonds validly tendered and accepted for purchase (each a "Purchase Price") and the total of the Purchase Price of the Target Bonds of each CUSIP validly tendered and accepted for purchase pursuant to this Invitation (the "Aggregate Purchase Price"), as well as Accrued Interest, will be funded from net proceeds of the 2025 Refunding Bonds, intended to be issued on the Settlement Date and other available moneys of the Commission, if any.

The outstanding bonds of the Commission of any series that are not identified in the tables above on pages (i) through (iii) are not subject to this Invitation.  For certain information concerning the Commission and its plan of refunding and its outstanding indebtedness see the Preliminary Official Statement for the 2025 Refunding Bonds attached hereto as Appendix A (the "2025 Refunding POS").  Bondholders must read the entirety of this Invitation, including Appendix A, in order to make an informed decision.

The Commission may decide to purchase less than all (or none) of the Target Bonds tendered to the Commission (see Section 2(l) "TERMS OF THIS INVITATION - Determination of Amounts to be Purchased" herein).  Target Bonds must be validly tendered for purchase by 5:00 p.m., New York City time, on March 31, 2025 (or such later date as the Commission may determine, the "Expiration Date").  The Commission reserves the right to extend, amend, waive the terms of or otherwise modify this Invitation at any time on or prior to the Expiration Date and at any time prior to the Settlement Date, to cancel this Invitation, as described in Section 2(p) "TERMS OF THIS INVITATION - Extension, Cancellation and Amendment; Changes to Terms."

Subject to the terms of this Invitation and the satisfaction of all conditions to the Commission's obligation to purchase tendered Target Bonds as described herein, and provided that (i) a Bondholder's Target Bonds tendered for purchase have been validly tendered and not validly withdrawn by the Expiration Date, and (ii) accepted by the Commission on or before the Final Acceptance Date, the Commission will purchase such Target Bonds tendered and accepted for purchase on the Settlement Date.  Accrued Interest on the Target Bonds purchased will also be paid on the Settlement Date.

The Commission's obligation to accept for purchase any tendered Target Bonds and the Commission's obligation to pay for Target Bonds validly tendered (and not validly withdrawn) and accepted pursuant to this Invitation is subject to the satisfaction of or waiver of the following conditions on or prior to the Settlement Date: (A) the successful completion by the Commission of the issuance of the 2025 Refunding Bonds, the proceeds of which will be sufficient, together with other available moneys of the Commission, to (x) fund the Aggregate Purchase Price of all Target Bonds validly tendered and accepted for purchase pursuant to this Invitation, plus Accrued Interest, and (y) pay all fees and expenses associated with the issuance of the 2025 Refunding Bonds and this Invitation; (B) receipt of all certifications and opinions required by the "Dealer Manager Agreement" executed between the Commission and the Dealer Manager in connection with this Invitation; (C) when taken together with the issuance of the 2025 Refunding Bonds, the Commission, determining in its reasonable discretion that it will obtain a satisfactory and sufficient economic benefit as a result of market conditions, including (x) all or any portion of the maturities listed on pages (i) through (iii) will produce sufficient debt service savings for the Commission, (y) the expected or actual level of participation by Bondholders, or (z) any other factors not within the sole control of the Commission, all on terms and conditions that are in the Commission's best interest (collectively, the "Financing Conditions"); and (D) the conditions to purchase in Section 2(o), "TERMS OF THIS INVITATION - Conditions to Purchase."

TO MAKE AN INFORMED DECISION AS TO WHETHER, AND HOW, TO TENDER TARGET BONDS FOR PURCHASE, BONDHOLDERS MUST READ THIS INVITATION, INCLUDING THE 2025 Refunding POS IN APPENDIX A HERETO.

None of the Commission, the Dealer Manager nor the Information Agent and Tender Agent (as defined herein) makes any recommendation that any Bondholder tender or refrain from tendering all or any portion of such Bondholder's Target Bonds for purchase.  Bondholders must make their own decisions and should read this Invitation carefully and consult with their financial advisor, accounting professional, tax professional, attorney, Financial Representative (as defined herein) or other appropriate professional in making these decisions.

Target Bonds tendered to the Commission in response to this Invitation but which are not purchased (such Target Bonds, the "Unpurchased Bonds") will continue to be outstanding, and payable and secured, pursuant to the terms of the Amended and Restated Indenture, dated as of August 1, 2002 (as supplemented and amended, the "Indenture"), by and between the Commission and the U.S. Bank Trust Company, National Association, as successor trustee (the "Trustee").  Bondholders of Unpurchased Bonds will continue to bear the risk of ownership of such Unpurchased Bonds, including the risk of redemption pursuant to the terms of such bonds.  See "- Unpurchased Bonds" herein.  Target Bonds that are tendered to the Commission but which the Commission does not purchase in response to this Invitation will be returned to the respective Bondholders.

b. Binding Contract to Sell

If a Bondholder's tender of a Target Bond is accepted by the Commission by the time specified herein, the Bondholder will be obligated to sell, and the Commission will be obligated to purchase, such Target Bonds on the Settlement Date at the Offer Purchase Price for such Target Bond, plus Accrued Interest, subject to the conditions described herein.  

c. Sources of Funds to Purchase Target Bonds

The Aggregate Purchase Price of the Target Bonds validly tendered for purchase pursuant to this Invitation will be funded from net proceeds of the 2025 Refunding Bonds, intended to be issued on the Settlement Date, and other available moneys of the Commission, if any.  The purchase by the Commission of any Target Bonds is contingent upon the satisfaction of the Financing Conditions, including the issuance and sale of the 2025 Refunding Bonds, and the conditions to purchase in Section 2(o), "TERMS OF THIS INVITATION - Conditions to Purchase."

The issuance of the 2025 Refunding Bonds is subject to market conditions and conditions to be satisfied on or prior to the Settlement Date. The 2025 Refunding Bonds are not being offered pursuant to this Invitation. 

d. Brokerage Commissions and Solicitation Fees

Bondholders will not be obligated to pay any brokerage commissions or solicitation fees to the Commission, the Dealer Manager, or the Information Agent and Tender Agent in connection with this Invitation.  However, each Bondholder should check with its broker, bank, account executive or other financial institution that maintains the account in which their Target Bonds are held (their "Financial Representative") to determine whether it will charge any commissions or fees.

e. Unpurchased Bonds

The Commission reserves the right to, and may decide to, defease or refund now or in the future (on an advance or current basis) some or all of the Unpurchased Bonds through the issuance of other taxable or tax-exempt obligations of the Commission or otherwise, or, in the future, to offer to purchase or exchange, some or all of the Unpurchased Bonds.  See "ADDITIONAL CONSIDERATIONS" herein.

The purchase by the Commission of Target Bonds may have certain potential adverse effects on Bondholders of Unpurchased Bonds, including the following:

·      the principal amount of the Unpurchased Bonds available to trade publicly will be reduced, which could adversely affect the liquidity and market value of any Unpurchased Bonds; and

·      the average life of the remaining Unpurchased Bonds may be affected, for Target Term Bonds (as defined herein).

2.   TERMS OF THIS INVITATION

a. Expiration Date

The Commission's invitation to tender hereunder will expire at 5:00 p.m., New York City time, on the Expiration Date.  Bondholders who are interested in selling their Target Bonds on the Settlement Date must follow the procedures more specifically described herein.  Bondholders and their Financial Representatives with questions about this Invitation should contact the Dealer Manager or the Information Agent and Tender Agent.

In the sole discretion of the Commission, the Commission may extend the Expiration Date, the Preliminary Acceptance Date, the Final Acceptance Date (each as defined herein) or the Settlement Date, or cancel, amend or otherwise modify or waive any conditions of this Invitation.  See "- Extension, Cancellation and Amendment; Changes to Terms" herein. 

b. Tenders Only Through the Commission's DTC ATOP Account

The Target Bonds are all held in book-entry-only form through the facilities of The Depository Trust Company ("DTC") through banks, brokers and other institutions that are participants in DTC.  All tenders of Target Bonds must be made through the Commission's Automated Tender Offer Program account at DTC described herein (the "DTC ATOP account").  The Commission will not accept any tenders that are not made through the DTC ATOP account.  As a result, Bondholders who are not DTC participants can only tender Target Bonds through the financial institution that maintains the DTC account in which their Target Bonds are held.

In order to ensure that each Bondholder receives proper consideration of the Purchase Price paid in connection with the purchase of such Bondholder's Target Bonds, a Bondholder's DTC participant should input such Bondholder's tender instructions separately into the DTC ATOP account. 

c. Information to Bondholders

The Commission may give information about this Invitation to the market and Bondholders, including, without limitation, any supplement to the 2025 Refunding Bonds POS, the Pricing Notice and all other notices, supplements and amendments hereto, by delivery of the information in the following ways: (a) to the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access website, currently located at http://emma.msrb.org ("EMMA Website"), using the CUSIP numbers for the Target Bonds; (b) DTC and through DTC to the DTC participants holding the Target Bonds; and (c) by posting electronically on the website of the Information Agent and Tender Agent at https://www.globic.com/sfpuc (such website, together with EMMA Website and DTC being collectively referred to herein as the "Information Services").  Delivery by the Commission of information through the Information Services will be deemed to constitute delivery of such information to each Bondholder.   

The Commission, the Dealer Manager, and the Information Agent and Tender Agent have no obligation to ensure that a Bondholder actually receives any information provided by the Commission in this manner.  Bondholders who would like to receive information furnished by the Commission through the Information Services must make appropriate arrangements with their Financial Representatives, or the Information Agent and Tender Agent.

d. Authorized Denominations

A Bondholder may tender Target Bonds for purchase of a particular CUSIP number that it owns in an amount of its choosing, but only in a principal amount equal to the minimum denomination of $5,000 (the "Authorized Denomination") or any multiple of $5,000 in excess thereof.

e. Provisions Applicable to All Tenders

Need for Advice.  A Bondholder should ask its Financial Representative or financial advisor for help in determining: (a) whether to tender Target Bonds of a particular CUSIP number for purchase, and (b) the principal amount of Target Bonds of such CUSIP number to be tendered, in each case in response to this Invitation.  A Bondholder also should inquire as to whether its Financial Representative or financial advisor will charge a fee for submitting tenders if the Commission purchases the Bondholder's tendered Target Bonds.  The Commission, the Dealer Manager, and the Information Agent and Tender Agent will not charge any Bondholder for tendering Target Bonds.

Need for Specificity of Tender.  A tender cannot exceed the par amount of Target Bonds owned by the Bondholder and must include the following information: (1) the CUSIP number(s) of the Target Bond(s) being tendered, and (2) the principal amount of each CUSIP number being tendered (such principal amount must be stated in Authorized Denominations and if not so stated, for tenders of less than all of the holder's position in the Target Bonds, such principal amount will be reduced to the greatest integral multiple of $5,000 equal to at least the applicable minimum Authorized Denomination).  Any Bondholder located outside of the United States should check with its broker to determine if there any additional minimal increments, alternative settlement timing or other limitations.

"All or none" offers are not permitted.

No alternative, conditional or contingent tenders will be accepted.  Bondholders who tender less than all of the Target Bonds that they hold must continue to hold their remaining Target Bonds in Authorized Denominations.

ALL TENDERS MUST BE MADE THROUGH THE DTC ATOP ACCOUNT.  THE COMMISSION WILL NOT ACCEPT ANY TENDERS THAT ARE NOT MADE THROUGH THE DTC ATOP ACCOUNT.  LETTERS OF TRANSMITTAL ARE NOT BEING USED IN CONNECTION WITH THIS INVITATION.  See "- Tender of Target Bonds by Financial Institutions; DTC ATOP Account" herein.

General.  A Bondholder may only tender Target Bonds it owns.  By tendering Target Bonds pursuant to this Invitation, a Bondholder will be deemed to have represented to, and agreed with, the Commission as set forth under "- Representations by Tendering Bondholders to the Commission" herein.  All tenders shall survive the death or incapacity of the tendering Bondholder.

f. Representations by Tendering Bondholders to the Commission

By tendering Target Bonds for purchase pursuant to this Invitation, each tendering Bondholder will be deemed to have represented to and agreed with the Commission that:

(a)  the Bondholder has received this Invitation and has had the opportunity to review this Invitation prior to making its decision to tender Target Bonds, and agrees if the purchase of any tendered Target Bonds is consummated, the purchase of such Target Bonds shall be on the terms and conditions set forth in this Invitation;

(b)  the Bondholder has full power and authority to tender, sell, assign and transfer the tendered Target Bonds; and on the Settlement Date, the Commission will acquire good, marketable and unencumbered title thereto, free and clear of all liens, charges, encumbrances, conditional sales agreements or other obligations and not subject to any adverse claims, subject to payment to the Bondholder of the Purchase Price for such Target Bonds plus, with respect to the purchased Target Bonds, Accrued Interest;

(c)  the Bondholder has made an independent decision to tender its Target Bonds for purchase pursuant to this Invitation, and as to the terms thereof, and such decision is based upon the Bondholder's judgment and upon advice from such advisors with whom the Bondholder has determined to consult;

(d)  the Bondholder is not relying on any communication from the Commission, the Dealer Manager or the Information Agent and Tender Agent as investment advice or as a recommendation to tender the Bondholder's Target Bonds, it being understood that the information from the Commission, the Dealer Manager and the Information Agent and Tender Agent related to the terms and conditions of this Invitation made pursuant to this Invitation shall not be considered investment advice or a recommendation to tender Target Bonds; and

(e)  the Bondholder is capable of assessing the merits of and understanding (on its own and/or through independent professional advice), and does understand, agree and accept, the terms and conditions of this Invitation.

g. Tender of Target Bonds by Financial Institutions; DTC ATOP Account

The Commission, through the Information Agent and Tender Agent, will establish the DTC ATOP account for purposes of this Invitation within three Business Days (as defined below) after the date of this Invitation.  Tender of Target Bonds in accordance with this Invitation may be made to the Commission through the DTC ATOP account.  Any financial institution that is a participant in DTC may make a book-entry tender of the Target Bonds by causing DTC to transfer the applicable Target Bonds into the DTC ATOP account in accordance with DTC's procedures. 

Concurrently with the delivery of Target Bonds through book-entry transfer into the DTC ATOP account, an Agent's Message (defined below) in connection with such book-entry transfer must be transmitted to and received at the DTC ATOP account by not later than 5:00 p.m., New York City time, on the Expiration Date (as this date may have been changed pursuant to this Invitation). 

The confirmation of a book-entry transfer into the DTC ATOP account as described above is referred to herein as a "Book-Entry Confirmation." The term "Agent's Message" means a message transmitted by DTC to, and received by, the DTC participant and forming a part of the Book-Entry Confirmation which states that DTC has received an express acknowledgment from the DTC participant tendering the Target Bonds that are the subject of such Book-Entry Confirmation, stating (1) the CUSIP number, series, and principal amount of the Target Bonds that have been tendered by such participant pursuant to this Invitation, and (2) that such participant on behalf of the related Bondholder agrees to be bound by the terms of this Invitation.  By causing DTC to transfer Target Bonds into the applicable Commission ATOP account, a financial institution warrants to the Commission that it has full authority, and has received from the Bondholder(s) of such Target Bonds all direction necessary, to tender and sell such Target Bonds as set forth in this Invitation.

Bondholders who are not DTC participants can only tender Bonds pursuant to this Invitation by making arrangements with and instructing their Financial Representative to tender the Bondholder's Target Bonds through the applicable Commission ATOP account.  To ensure a Bondholder's Target Bonds are tendered to the applicable Commission ATOP account by 5:00 p.m., New York City time, on the Expiration Date, a Bondholder must provide instructions to its Financial Representative in sufficient time for the Financial Representative to tender the Bondholder's Target Bonds to the applicable Commission ATOP account by this deadline.  A Bondholder should contact its Financial Representative for information as to when the Financial Representative needs the Bondholder's instructions in order to tender the Bondholder's Target Bonds to the applicable Commission ATOP account by 5:00 p.m., New York City time, on the Expiration Date.

THE COMMISSION, THE DEALER MANAGER, AND THE INFORMATION AGENT AND TENDER AGENT ARE NOT RESPONSIBLE FOR THE TRANSFER OF ANY TENDERED BONDS TO THE APPLICABLE COMMISSION ATOP ACCOUNT OR FOR ANY MISTAKES, ERRORS OR OMISSIONS IN THE TRANSFER OF ANY TENDERED TARGET BONDS.

"Business Day" means any day other than (i) a Saturday or a Sunday, or (ii) a day on which the offices of the Commission or banking institutions in California or New York are required or authorized by law to be closed.

h. Determinations as to Form and Validity of Tender Offer; Right of Waiver

All questions as to the validity (including the time of receipt at the DTC ATOP account), form, eligibility, and acceptance of any Target Bonds tendered for purchase pursuant to this Invitation will be determined by the Commission in its sole discretion and will be final, conclusive, and binding on the Bondholders.

The Commission reserves the right to waive any irregularities or defects in any tender in response to this Invitation.  The Commission, the Dealer Manager and the Information Agent and Tender Agent are not obligated to give notice to the Bondholders of any defects or irregularities in tenders of Target Bonds, and they will have no liability for failing to give such notice.

i. Amendments and Withdrawals of Tenders Prior to Expiration Date

A Bondholder may amend its offer to tender for purchase in respect of the amount being tendered by causing an amended offer to be received at the DTC ATOP account by not later than 5:00 p.m., New York City time, on the Expiration Date.

An offer to tender for purchase may be withdrawn by a Bondholder in response to this Invitation by causing a withdrawal notice to be received at the DTC ATOP account by not later than 5:00 p.m., New York City time, on the Expiration Date.

Any amendment or withdrawal must be submitted in substantially the same manner as an offer in response to this Invitation.  All amendments or withdrawal notices must be made through the DTC ATOP account.  The Commission will not accept any amendments or withdrawals that are not made through the DTC ATOP account.  Bondholders who are not DTC participants can only amend or withdraw their offer to tender in response to this Invitation by making arrangements with and instructing their Financial Representative to submit the Bondholder's amended offer or the Bondholder's notice of withdrawal through the DTC ATOP account.

Bondholders who have tendered for purchase their Target Bonds will not receive any information from the Commission, the Dealer Managers or the Information Agent and Tender Agent concerning offers by other Bondholders.  Offering Bondholders will not be afforded an opportunity to amend their offers after 5:00 p.m. on the Expiration Date. An amended or withdrawn offer must specify the applicable CUSIP number, and with respect to amended offers, the principal amount previously offered and the new amount being offered.  All questions as to the validity (including the time of receipt) of an amendment or withdrawal will be determined by the Commission in its sole discretion and will be final, conclusive and binding.

ALL TENDERS OF TARGET BONDS SHALL BE IRREVOCABLE AT 5:00 P.M. ON THE EXPIRATION DATE.

j. Determination of Offer Purchase Prices

On or about March 24, 2025, the Commission will publish the Pricing Notice in the form attached hereto as Appendix B, which will set forth (a) the Offer Purchase Price for each respective CUSIP of the Tax-Exempt Target Bonds (which may differ from the "Indicative Offer Purchase Prices" listed on page (iii) herein) and (b) the Fixed Spread for each respective CUSIP of the Taxable Target Bonds (which may differ from the "Indicative Fixed Spreads" listed on pages (i) and (ii) herein) as well as an illustration of the resulting Offer Purchase Prices for the Taxable Target Bonds based on market conditions as described therein.  The illustrative Offer Purchase Prices shown in the Pricing Notice with respect to the Taxable Target Bonds will be subject to change and the actual Offer Purchase Prices for the Taxable Target Bonds will be determined on or about 10:00 AM New York City time on April 2, 2025. 

The Pricing Notice will be made available through the Information Services.

Tax-Exempt Target Bonds.  The Offer Purchase Prices will be set forth in the Pricing Notice for each respective maturity and corresponding CUSIP of Tax-Exempt Target Bonds tendered pursuant to this Invitation.

The Purchase Price to be received on the Settlement Date by a Bondholder whose Tax-Exempt Target Bonds were validly tendered and accepted for purchase, in whole or in part, by the Commission will equal the par amount of such Bondholders' purchased Tax-Exempt Target Bonds multiplied by the Offer Purchase Price of such Tax-Exempt Target Bonds divided by 100.  In addition to the Purchase Price of the Tax-Exempt Target Bonds accepted for purchase by the Commission, Accrued Interest on such Tax-Exempt Target Bonds will be paid by the Commission on the Settlement Date.

Taxable Target Bonds.  The applicable Fixed Spread, expressed as an interest rate percentage, will be added to the yield on the relevant Benchmark U.S. Treasury Security (the "Treasury Security Yield") corresponding thereto to arrive at the Purchase Yield used to calculate the Offer Purchase Price for each maturity and corresponding CUSIP of the Taxable Target Bonds.  The Treasury Security Yield will be based the bid-side yield of such Benchmark U.S. Treasury Security, as quoted on the Bloomberg Bond Trader FIT1 series of pages at approximately 10:00 a.m., New York City time, on April 2, 2025.

On April 2, 2025, the Notice of Taxable Target Bonds Offer Purchase Prices will be made available through the Information Services.  See "PROVISIONS APPLICABLE TO THE INVITATION" above.

The Purchase Yields will be used to calculate the Offer Purchase Prices expressed as a dollar amount per $100 principal amount of the Taxable Target Bonds.  The Offer Purchase Prices will be calculated using the market standard bond pricing formula as of the Settlement Date using the relevant Purchase Yield, the coupon of the relevant Taxable Target Bond and the maturity date for each Taxable Target Bond, except for the Taxable Target Bonds that are term bonds (the "Taxable Target Term Bonds"), which will be priced to their respective average life date as described below.

k. Adjustment of Sinking Fund Provisions

The Taxable Target Term Bonds and the Tax-Exempt Target Bonds that are term bonds (collectively, the "Target Term Bonds") are subject to mandatory sinking fund redemptions in specified principal amounts prior to their maturity dates.  If less than all of any Target Term Bond is purchased by the Commission pursuant to the Invitation, under the Indenture, the specified principal amounts of the Target Term Bonds of such CUSIP that remain outstanding to be redeemed on each mandatory sinking fund redemption date and paid upon their maturity date will be adjusted, with the remaining mandatory sinking fund redemption payment amounts to be reduced proportionally by the highest possible integral multiple (if any) of $5,000 principal amount, as adjusted if deemed necessary by the Commission to comply with applicable tax law.  Such adjustment will be made in the sole determination of the Commission.

l. Determination of Amounts to be Purchased

The Commission is not required to accept for purchase any Target Bond tendered for purchase.  Depending on the results of this Invitation and the satisfaction or waiver by the Commission of the Financing Conditions and other conditions described in this Invitation, the Commission, in its sole discretion, will determine which Target Bonds of a CUSIP, if any, it will purchase.  The Commission therefore has the right, but is not obligated, to accept for purchase none, some, or all of the tendered Target Bonds. 

On April 1, 2025, unless such time or date is extended by the Commission (the "Preliminary Acceptance Date"), the Commission will determine the preliminary principal amount (if any) of the Target Bonds of a CUSIP that it intends to purchase pursuant to this Invitation, which may be zero.  Notice of the preliminary principal amount of the Target Bonds (if any) for each CUSIP that the Commission initially intends to purchase (the "Preliminary Acceptance Notice") will be provided through the Information Services on the Preliminary Acceptance Date.

On April 2, 2025, unless such date is extended by the Commission (the "Final Acceptance Date"), the Commission will make a final determination of the principal amount (if any) of Target Bonds of each CUSIP that it intends to purchase pursuant to this Invitation, which may be zero, from among those Target Bonds of such CUSIP that were initially accepted for purchase pursuant to the Preliminary Acceptance Notice.  The Commission shall be under no obligation to accept for purchase all or any portion of any Target Bond initially accepted.  Notice of the principal amount of the Target Bonds (if any) for each CUSIP that the Commission intends to purchase (the "Final Acceptance Notice") will be provided through the Information Services on the Final Acceptance Date. 

If the Commission accepts for purchase less than all of the tendered Target Bonds for a CUSIP, the Commission will accept those tendered Target Bonds on a pro rata basis.  The principal amount of each individual offer will be adjusted, pro rata, based upon a proration factor for each such CUSIP (each a "Proration Factor").  In such event, should the principal amount of any individual offer, when adjusted by the Proration Factor, result in an amount that is not a multiple of $5,000, the principal amount of such offer will be rounded down to the nearest multiple of $5,000. If as a result of such adjustment, the principal amount of a Bondholder's unaccepted Target Bonds is less than the Minimum Authorized Denomination of $5,000, the Commission will reject such Bondholder's offer in whole.  The Commission will determine the Proration Factor that permits it to accept the amount of Target Bonds it has determined to purchase.

The purchase by the Commission of any Target Bonds is contingent, among other conditions set forth hereunder, upon the issuance and sale of the 2025 Refunding Bonds.  The issuance of the 2025 Refunding Bonds is subject to market conditions and conditions to be satisfied on or prior to the Settlement Date.

Notwithstanding any other provision of this Invitation, the obligation of the Commission to accept for purchase and to pay for Target Bonds validly tendered (and not validly withdrawn) by Bondholders pursuant to this Invitation is subject to the satisfaction or waiver of the conditions set forth under Section 2(o), "Conditions to Purchase" below.  The Commission reserves the right, subject to applicable law, to amend or waive any of the conditions to this Invitation, in whole or in part, any time prior to the Expiration Date or from time to time subject to the Financing Conditions and other conditions described in this Invitation.  This Invitation may be withdrawn by the Commission at any time prior to the Expiration Date.  See "- Extension, Cancellation and Amendment; Changes to Terms" and "- Conditions to Purchase" herein.

m. Settlement Date; Purchase of Target Bonds

On the Settlement Date, the Commission will purchase and pay for all Target Bonds tendered and accepted for purchase, at the applicable Offer Purchase Prices, and will pay Accrued Interest, subject to satisfaction or waiver by the Commission of all conditions to the Commission's obligation to purchase, and the tendering Bondholders will sell such Target Bonds to the Commission for such consideration.

The Commission may, in its sole discretion, change the Settlement Date by giving notice through the Information Services prior to the change.

If the conditions to the Commission's obligation to purchase the Target Bonds tendered and accepted for purchase pursuant to this Invitation, as described herein, are satisfied the Commission will pay the Aggregate Purchase Price and Accrued Interest in immediately available funds on the Settlement Date by deposit of such amount with DTC.  The Commission expects that, in accordance with DTC's standard procedures, DTC will transmit amounts sufficient to purchase the tendered and accepted Target Bonds at their Offer Purchase Prices and pay Accrued Interest in immediately available funds to its participant financial institutions that hold such tendered Target Bonds for delivery to the Bondholders.  None of the Commission, the Dealer Manager or the Information Agent and Tender Agent has any responsibility or liability for the distribution of such amounts by DTC or its participant financial institutions to Bondholders.

n. Extension, Cancellation and Amendment; Changes to Terms

The Commission has the right to extend this Invitation by notice given through the Information Services at any time but no later than the first Business Day following the previously scheduled Expiration Date, or any prior extension thereof.  Notice of an extension of the Expiration Date will be effective when such notice is given.

The Commission also has the right to extend the Preliminary Acceptance Date, the Final Acceptance Date or Settlement Date by notice given through the Information Services at any time but no later than the first Business Day following the previously scheduled Preliminary Acceptance Date, Final Acceptance Date or Settlement Date, as applicable, or any prior extension thereof.  Notice of an extension of the Preliminary Acceptance Date, Final Acceptance Date or Settlement Date will be effective when such notice is given.

The Commission also reserves the right to amend, waive the terms of or otherwise modify this Invitation at any time on or prior to the Expiration Date, by giving notice through the Information Services of such amendment, waiver or other modification.  The amendment, waiver or modification will be effective at the time specified in such notice.

The Commission also has the right, at any time prior to the Final Acceptance Date, to cancel this Invitation by giving notice through the Information Services of such cancellation.  The Commission also has the right, prior to the Settlement Date, to cancel this Invitation pursuant to the conditions set forth in Section 2(o), "Conditions to Purchase," below by giving notice through the Information Services of such cancellation.  The cancellation will be effective at the time specified in such notice.  The Commission will have no obligation to purchase Target Bonds if cancellation of this Invitation occurs.

Notwithstanding any other provision of this Invitation, the Commission will also have no obligation to accept for purchase Target Bonds offered for tender.

If the Commission extends the Expiration Date, or amends, otherwise modifies or waives any of the terms or conditions of this Invitation in any respect, the Commission may (but is not required to) disseminate additional Invitation materials and extend this Invitation to the extent required to allow, in the Commission's judgment, reasonable time for dissemination to Bondholders and for Bondholders to respond.

No extension or amendment or other modification or waiver of the terms or conditions of this Invitation will change the Commission's right to decline to purchase Target Bonds without liability on the conditions stated herein or give rise to any liability of the Commission or the Information Agent and Tender Agent to any Bondholder or nominee.

o. Conditions to Purchase

The consummation of the purchase of the Target Bonds pursuant to this Invitation is conditioned upon the satisfaction of the Financing Conditions and other conditions described in this Invitation.  Furthermore, the Commission will not be required to purchase any Target Bonds, and will incur no liability as a result, if, before payment for Target Bonds on the Settlement Date:

a.   The Commission does not, for any reason, have sufficient funds on the Settlement Date from the proceeds of the 2025 Refunding Bonds to pay the Aggregate Purchase Price plus Accrued Interest of tendered Target Bonds accepted for purchase pursuant to this Invitation and pay all fees and expenses associated with the 2025 Refunding Bonds and this Invitation;

b.   Litigation or another proceeding is pending or threatened which the Commission believes may, directly or indirectly, have an adverse impact on this Invitation or the expected benefits of this Invitation to the Commission or the Bondholders;

c.   A war, other hostilities, or the escalation thereof, public health or other national emergency, banking moratorium, suspension of payments by banks, a general suspension of trading by the New York Stock Exchange or a limitation of prices on the New York Stock Exchange exists and the Commission believes this fact makes it inadvisable to proceed with the purchase of Target Bonds;

d.   A material change in the business or affairs of the Commission has occurred which the Commission believes makes it inadvisable to proceed with the purchase of Target Bonds;

e.   A material change in the net benefits of the transaction contemplated by this Invitation and the Refunding Bond POS has occurred due to a material change in market conditions that the Commission reasonably believes makes it inadvisable to proceed with the purchase of Target Bonds;

f.    There shall have occurred a material disruption in securities settlement, payment or clearance services.

These conditions are for the sole benefit of the Commission.  They may be asserted by the Commission prior to the time of payment for the Target Bonds on the Settlement Date.  The conditions may be waived by the Commission in whole or in part at any time and from time to time in its sole discretion and may be exercised independently for each maturity date and CUSIP number of the Target Bonds.  The failure by the Commission at any time to exercise any of these rights will not be deemed a waiver of any of these rights, and the waiver of these rights with respect to particular facts and other circumstances will not be deemed a waiver of these rights with respect to any other facts and circumstances.  Each of these rights will be deemed an ongoing right of the Commission that may be asserted at any time and from time to time.  Any determination by the Commission concerning the events described in this Section 2(q) will be final and binding upon all parties.  If, prior to the time of payment of any Target Bonds any of the events described happens, the Commission will have the absolute right to cancel its obligations to purchase Target Bonds without any liability to any Bondholders or any other person.

3.   ADDITIONAL CONSIDERATIONS

None of the Commission, the Dealer Manager or the Information Agent and Tender Agent makes any recommendation that any Bondholder tender or refrain from tendering for purchase all or any portion of the Target Bonds.  Each Bondholder must make its decision and should read this Invitation and consult with its financial advisor, accounting professional, tax professional, attorney, Financial Representative or other appropriate professional in making such decision.

In deciding whether to participate in this Invitation, each Bondholder should consider carefully, in addition to the other information contained in this Invitation, the following:

·      Bondholders of Unpurchased Bonds will continue to hold such Unpurchased Bonds and such Unpurchased Bonds will remain outstanding.  See "INTRODUCTION - Unpurchased Bonds" herein.

·      The Commission intends, but is not obligated, to defease certain of the Unpurchased Bonds or portions thereof, which are identified in the tables on the inside cover pages, to their maturity dates or call dates (where applicable), that it does not purchase pursuant to this Invitation.  There can be no assurance as to whether a particular Bondholder's Target Bonds will be among the Unpurchased Bonds defeased.

·      Even if the Commission does not purchase any Target Bonds, the Commission shall have the right to defease or refund now or in the future (on an advance or current basis) some or all of the Target Bonds through the issuance of other taxable or tax-exempt obligations of the Commission or otherwise, or, in the future, to offer to purchase or exchange, some or all of the Target Bonds, upon such terms and at such prices as it may determine.  Any future acquisition of Target Bonds may be on the same terms or on terms that are more or less favorable to Bondholders than the terms described in this Invitation and the Pricing Notice.  The decision to make future purchases or exchanges by the Commission and the terms of such future transactions will depend on various factors existing at that time.  There can be no assurance as to which of these alternatives, if any, the Commission will ultimately choose to pursue in the future.

·      The purchase or redemption by the Commission of Target Bonds of any CUSIP number may have certain potential adverse effects on Bondholders of Target Bonds with such CUSIP not purchased pursuant to this Invitation, including, but not limited to, the principal amount of the Target Bonds of such CUSIP number available to trade publicly may be reduced, which could adversely affect the liquidity and market value of any Unpurchased Bonds of that CUSIP number that remain outstanding.

4.   SUMMARY OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following is a general summary of the U.S. federal income tax consequences for Bondholders that respond to this Invitation and have their tender(s) accepted by the Commission.  The discussion is based on the Internal Revenue Code of 1986, as amended (the "Code"), the Treasury Regulations promulgated thereunder, and relevant rulings and decisions now in effect, all of which are subject to change or differing interpretations.  No assurances can be given that future changes in U.S. federal income tax laws will not alter the conclusions reached herein.  The discussion below does not purport to deal with U.S. federal income tax consequences applicable to all categories of investors.  Further, this summary does not discuss all aspects of U.S. federal income taxation that may be relevant to a particular investor in the Target Bonds in light of the investor's particular circumstances or to certain types of investors subject to special treatment under U.S. federal income tax laws (including individuals who are neither citizens nor residents of the United States; foreign corporations, trusts and estates, in each case, as defined for U.S. federal income tax purposes; insurance companies; tax-exempt organizations; financial institutions; brokers-dealers; partnerships and other entities classified as partnerships for U.S. federal income tax purposes; and persons who have hedged the risk of owning the Target Bonds).  Bondholders should note that no rulings have been or will be sought from the Internal Revenue Service (the "IRS"), and no assurance can be given that the IRS will not take contrary positions with respect to any of the U.S. federal income tax consequences discussed below.  This U.S. federal income tax discussion is included for general information only and should not be construed as a tax opinion nor tax advice by the Commission or any of its advisors or agents to the Bondholders, and Bondholders, therefore, should not rely upon such discussion.

The discussion does not deal with special classes of beneficial owners of the Target Bonds, including but not limited to dealers or traders in securities, investors that elect mark-to-market accounting, banks, financial institutions, insurance companies, retirement plans or other tax-deferred or tax-advantaged accounts, tax-exempt organizations, partnerships or other pass-through entities (or entities treated as such for U.S. federal income tax purposes), U.S. expatriates, persons holding their Target Bonds as a part of a hedging, integration, conversion or constructive sale transaction or a straddle, Bondholders that are "United States persons," as defined in section 7701(a)(30) of the Code ("U.S. Holders") and are subject to the alternative minimum tax, U.S. Holders that have a functional currency other than the U.S. Dollar, and persons who are not U.S. Holders (all of such Holders should consult their tax advisors).

If a partnership or other flow-through entity holds the Target Bonds, the tax treatment of a partner in the partnership or beneficial owner of the flow-through entity generally will depend upon the status of the partner or beneficial owner and the activities of the partnership or flow-through entity.  A partner of a partnership or a beneficial owner of a flow-through entity holding Target Bonds should consult its tax advisor regarding the U.S. federal income tax consequences of this Invitation.

Non-tendering Bondholders will not be subject to any U.S. federal income tax consequences in connection with this Invitation.

BONDHOLDERS SHOULD CONSULT THEIR TAX ADVISORS IN DETERMINING THE U.S. FEDERAL, STATE, LOCAL, FOREIGN AND ANY OTHER TAX CONSEQUENCES TO THEM FROM THE DISPOSITION OF THEIR TARGET BONDS PURSUANT TO THIS INVITATION.

The Commission's purchase of a Target Bond for cash in accordance with this Invitation will be a taxable event for U.S. federal income tax purposes.  A Bondholder who sells Target Bonds pursuant to this Invitation generally will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the (i) the amount of money received by the Bondholder, exclusive of any amount paid for accrued interest, and (ii) the Bondholder's adjusted U.S. federal income tax basis in the Target Bonds. 

Any gain or loss arising in connection with a taxable sale or exchange pursuant to this Invitation may be capital gain or loss (either long-term or short-term, depending on the Bondholder's holding period for the Target Bonds) or may be ordinary income or loss, depending on the particular circumstances of the Bondholder.  Non-corporate holders may be eligible for reduced rates of U.S. federal income tax on long-term capital gains.  The deductibility of capital losses is subject to various limitations.

Under section 3406 of the Code, a tendering Bondholder who is a "United States person," as defined in section 7701(a)(30) of Code, may, under certain circumstances, be subject to U.S. federal backup withholding.  Backup withholding applies if such tendering Bondholder: (i) fails to furnish such Bondholder's Social Security number or other taxpayer identification number ("TIN"); (ii) furnishes an incorrect TIN; (iii) fails to report property interest, dividends or other "reportable payments" as defined in the Code; or (iv) under certain circumstances, fails to provide a certified statement, signed under penalty of perjury, that the TIN provided is correct and that such Bondholder is not subject to backup withholding.  Bondholders should consult their tax advisors regarding whether backup withholding applies to them and, if backup withholding applies, regarding qualification for an exemption from backup withholding and the procedures for obtaining such exemption.  Backup withholding is not an additional tax.  Any amounts deducted and withheld should generally be allowed as a credit against the Bondholder's U.S. federal income tax liability.

5.   DEALER MANAGER

The Commission has retained Jefferies LLC ("Jefferies LLC") to act on its behalf as Dealer Manager for this Invitation.  The Commission has agreed to pay to the Dealer Manager a customary fee for its services and to reimburse the Dealer Manager for its reasonable expenses relating to this Invitation.  References in this Invitation to the Dealer Manager are to Jefferies LLC only in its capacity as the Dealer Manager.  The compensation of the Dealer Manager is based upon the amount of Target Bonds accepted for purchase by the Commission.

The Dealer Manager may contact Bondholders regarding this Invitation and may request brokers, dealers, custodian banks, depositories, trust companies and other nominees to forward this Invitation to beneficial owners of the Target Bonds.

The Dealer Manager and its affiliates together comprise a full-service financial institution engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities.  The Dealer Manager and its affiliates may have, from time to time, performed and may in the future perform, various investment banking services for the Commission for which they received or will receive customary fees and expenses.  In the ordinary course of their various business activities, the Dealer Manager and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities and financial instruments which may include bank loans and/or credit default swaps) for its own account and for the accounts of its customers and may at any time hold long and short positions in such securities and instruments.  Such investment securities activities may involve securities and instruments of the Commission, including the Target Bonds.  Affiliates of the Dealer Manager may have holdings of Target Bonds that they are unable to disclose for legal or regulatory reasons.

In addition to its role as Dealer Manager for the Target Bonds, Jefferies LLC is also serving as book-running lead Underwriter for the 2025 Refunding Bonds.

The Dealer Manager is not acting as a financial or municipal advisor to the Commission in connection with this Invitation.

6.   INFORMATION AGENT AND TENDER AGENT

The Commission has retained Globic Advisors to serve as Information Agent and Tender Agent for this Invitation.  The Commission has agreed to pay the Information Agent and Tender Agent customary fees for its services and to reimburse the Information Agent and Tender Agent for its reasonable expenses relating to this Invitation.

7.   MISCELLANEOUS

This Invitation is not being EXTENDED to, and Target BONDS TENDERED IN RESPONSE TO THIS INVITATION will not be accepted from or on behalf of, Bondholders in any jurisdiction in which this Invitation or SUCH OFFER OR acceptance thereof would not be in compliance with the laws of such jurisdiction.

No one has been authorized by the Commission, the Dealer Manager or the Information Agent and Tender Agent to recommend to any Bondholders whether to tender Target Bonds in response to this Invitation or the amount of Target Bonds to tender, and none of the Commission, the Dealer Manager or the Information Agent and Tender Agent makes any recommendation that any Bondholder tender (or refrain from tendering) all or any portion of such Holder's Target Bonds.  No one has been authorized by the Commission, the Dealer Manager or the Information Agent and Tender Agent to give any information or to make any representation in connection with this Invitation other than those contained in this Invitation.  Any recommendation, information, and representations given or made cannot be relied upon as having been authorized by the Commission, the Dealer Manager or the Information Agent and Tender Agent.  Bondholders must make these decisions and should read this Invitation and consult with their financial advisor, accounting professional, tax professional, attorney, Financial Representative or other appropriate professional in so doing.

The Information Agent and Tender Agent for this Invitation is:

Globic Advisors

Attn: Robert Stevens

485 Madison Ave, 7^th Floor

New York, New York 10022

Phone: (212) 227-9622