City of Houston, Texas

OFFICIAL STATEMENT DATED AS OF JUNE 28, 2011 NEW ISSUE — BOOK-ENTRY ONLY RATINGS: SEE “RATINGS” HEREIN In the opinion of Co-Bond Counsel, under existing law, (i) (A) interest on the Series 2011A Bonds (as defined below) is excludable from gross income for federal income tax purposes except for any period a Series 2011A Bond is held by a person who, within the meaning of section 147(a) of the Internal Revenue Code, as amended, is a “substantial user” or a “related person” to a “substantial user” of the facilities financed or refinanced with the proceeds of the Series 2011A Bonds, as described under “TAX MATTERS” herein, and (B) interest on the Series 2011A Bonds is an item of tax preference that is includable in alternative minimum taxable income for purposes of determining the alternative minimum tax imposed on individuals and corporations, and (ii) (A) interest on the Series 2011B Bonds (as defined below) is excludable from gross income for federal income tax purposes, and (B) interest on the Series 2011B Bonds is not an item of tax preference that is includable in alternative minimum taxable income for purposes of determining the alternative minimum tax imposed on individuals. See “TAX MATTERS” herein for a discussion of the opinion of Co-Bond Counsel, including a description of alternative minimum tax consequences for corporations holding Series 2011B Bonds. CITY OF HOUSTON, TEXAS Airport System $449,975,000 $116,930,000 SUBORDINATE Lien REvenue SUBORDINATE Lien REvenue Refunding Bonds, Refunding Bonds, Series 2011A (AMT) SERIES 2011B (Non-AMT) Interest Accrual Date: Date of Delivery CUSIp prefix: 442348 Due: As shown on inside cover This Official Statement is provided to furnish information in connection with the offering by the City of Houston, Texas (the “City”) of its Airport System Subordinate Lien Revenue Refunding Bonds, Series 2011A (AMT) (the “Series 2011A Bonds”) and Airport System Subordinate Lien Revenue Refunding Bonds, Series 2011B (Non-AMT) (the “Series 2011B Bonds,” and together with the Series 2011A Bonds, the “Series 2011 Bonds”). The Series 2011 Bonds will be issued in fully registered form in denominations of $5,000 or any integral multiple thereof. Proceeds of the sale of the Series 2011A Bonds will be used to (i) refund certain of the City’s Airport System Subordinate Lien Revenue Bonds as more specifically described in SCHEDULE 1 and collectively referred to herein as the “2011A Refunded Bonds,” (ii) pay a municipal bond insurance premium in connection with a specific maturity of the Series 2011A Bonds, and (iii) pay the costs of issuance of the Series 2011A Bonds and costs relating to such refunding. Proceeds of the sale of the Series 2011B Bonds will be used to (i) refund certain of the City’s Airport System Subordinate Lien Revenue Bonds as more specifically described in SCHEDULE 1 and collectively referred to herein as the “2011B Refunded Bonds,” and (ii) pay the costs of issuance of the Series 2011B Bonds and costs relating to such refunding. The 2011A Refunded Bonds and the 2011B Refunded Bonds are collectively referred to herein as the “Refunded Bonds.” See “PURPOSE AND PLAN OF FINANCING.” Interest on the Series 2011 Bonds will accrue from their date of delivery until maturity or prior redemption and is payable semi-annually on each January 1 and July 1 commencing January 1, 2012. The Bank of New York Mellon Trust Company, National Association (the “Paying Agent/ Registrar”) is the initial Paying Agent/Registrar. The Series 2011 Bonds, when issued, will be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company, New York, New York (“DTC”), which will act as securities depository for the Series 2011 Bonds, until DTC resigns or is discharged. The Series 2011 Bonds will be available to purchasers only in book-entry form. For as long as Cede & Co. is the exclusive registered owner of the Series 2011 Bonds, the principal of and interest on the Series 2011 Bonds will be payable by the Paying Agent/Registrar to DTC, which will be responsible for making such payments to DTC Participants for subsequent remittance to the owners of beneficial interests in the Series 2011 Bonds. The purchasers of the Series 2011 Bonds will not receive certificates representing their beneficial ownership interests therein. The Series 2011 Bonds are special obligations of the City that, together with the Outstanding Subordinate Lien Bonds and any Additional Subordinate Lien Bonds hereafter issued, are payable from and equally and ratably secured by a lien on the Net Revenues of the Houston Airport System, subject and subordinate to the prior and superior lien of Outstanding Senior Lien Obligations and Additional Senior Lien Obligations, if any, all as defined and provided in any ordinance authorizing the issuance of such bonds, and certain Funds established pursuant to such ordinances. See “COVENANTS AND TERMS OF THE ORDINANCE.” THE SERIES 2011 BONDS DO NOT CONSTITUTE AN INDEBTEDNESS OR GENERAL OBLIGATION OF THE CITY. OWNERS OF THE SERIES 2011 BONDS SHALL NEVER HAVE THE RIGHT TO DEMAND PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE SERIES 2011 BONDS FROM ANY FUNDS RAISED OR TO BE RAISED BY TAXATION. The Series 2011 Bonds are subject to optional redemption prior to maturity, as described herein. See “THE SERIES 2011 BONDS – Redemption.” SEE INSIDE COvER pAGE FOR MATURITY, pRICING SCHEDULES, AND CUSIp NUMBERS This cover page is not intended to be a summary of the terms of, or the security for, the Series 2011 Bonds. Investors are advised to read the Official Statement in its entirety to obtain information essential to the making of an informed investment decision. The Series 2011 Bonds are offered by the Underwriters listed below when, as and if issued by the City and accepted by the Underwriters, subject to the approving opinion of the Attorney General of the State of Texas and the opinion of Vinson & Elkins L.L.P., Houston, Texas, and Bates & Coleman, P.C., Houston, Texas, Co-Bond Counsel for the City, as to the validity of the issuance of the Series 2011 Bonds under the Constitution and the laws of the State of Texas. Certain matters will be passed upon for the City by its Special Disclosure Co-Counsel, Bracewell & Giuliani LLP, Houston, Texas and Bratton & Associates, Houston, Texas. Certain other legal matters will be passed upon for the Underwriters by its counsel, Fulbright & Jaworski L.L.P., Houston, Texas. The Series 2011 Bonds are expected to be available for delivery through the facilities of DTC on or about July 21, 2011 (“Date of Delivery”). Goldman, Sachs & Co. Morgan Stanley Wells Fargo Securities Rice Financial products Company, Inc. Cabrera Capital Markets, LLC Raymond James MATURITY AND PRICING SCHEDULE $449,975,000 CITY OF HOUSTON, TEXAS AIRPORT SYSTEM SUBORDINATE LIEN REVENUE REFUNDING BONDS, SERIES 2011A (AMT) Maturity Principal (3) (2)* (July 1) Amount Interest Rate Initial Yield CUSIP No. 2012 $31,555,000 3.000% 0.600% 4423484D7 2013 31,285,000 5.000 1.870 4423484E5 2014 32,845,000 5.000 2.390 4423484F2 2015 20,000,000 5.000 2.730 4423484G0 2016 36,215,000 5.000 3.020 4423484H8 2017 38,380,000 5.000 3.380 4423484J4 2018 35,830,000 5.000 3.780 4423484K1 2019 36,830,000 5.000 4.110 4423484L9 2020 38,675,000 5.000 4.350 4423484M7 2021 40,600,000 5.000 4.530 4423484N5 2022 42,640,000 5.000 4.710(1) 4423484P0 2023 15,250,000 5.000 4.870(1) 4423484Q8 2024 16,010,000 5.000 4.970(1) 4423484R6 2025 16,810,000 5.000 5.070 4423484S4 2026 2,555,000 5.000 5.180 4423484U9 Insured Series 2011A Bond Maturity Principal (3) (2)† (July 1) Amount Interest Rate Initial Yield CUSIP No. 2015(4) 14,495,000 5.000 2.580 4423484T2 (1) Reflects yield to first optional call date, July 1, 2021. See "THE SERIES 2011 BONDS – Redemption – Optional Redemption." (2) Copyright 2005, American Bankers Association. CUSIP numbers for the Series 2011 Bonds have been assigned by Standard & Poor's CUSIP Service Bureau, a Division of The McGraw-Hill Companies, Inc. and are included solely for the convenience of the owners of the Series 2011 Bonds. Neither the City, the Co-Financial Advisors nor the Underwriters are responsible for the selection or correctness of the CUSIP numbers set forth herein. (3) The Series 2011A Bonds maturing on or after July 1, 2022, are subject to optional redemption by the City in whole or in part on July 1, 2021 or any date thereafter at a redemption price of par plus accrued interest from the most recent interest payment date to, but not including, the redemption date. (4) The scheduled payment of principal and interest when due will be guaranteed under a municipal bond insurance policy to be issued by ASSURED GUARANTY MUNICIPAL CORP. concurrently with the delivery of the Insured Series 2011A Bonds. See "MUNICIPAL BOND INSURANCE." i MATURITY AND PRICING SCHEDULE $116,930,000 CITY OF HOUSTON, TEXAS AIRPORT SYSTEM SUBORDINATE LIEN REVENUE REFUNDING BONDS, SERIES 2011B (NON-AMT) Maturity Principal (3) (2)‡ (July 1) Amount Interest Rate Initial Yield CUSIP No. 2012 $1,540,000 3.000% 0.815% 4423484V7 2013 7,735,000 5.000 1.170 4423484W5 2014 8,150,000 5.000 1.590 4423484X3 2015 8,520,000 5.000 1.960 4423484Y1 2016 8,945,000 5.000 2.230 4423484Z8 2017 9,390,000 5.000 2.640 4423485A2 2018 8,175,000 5.000 3.030 4423485B0 2019 5,925,000 5.000 3.390 4423485C8 2020 6,220,000 5.000 3.630 4423485D6 2021 1,550,000 5.000 3.810 4423485E4 2022 1,630,000 5.000 3.990(1) 4423485F1 2023 1,715,000 5.000 4.170(1) 4423485G9 2024 1,795,000 5.000 4.320(1) 4423485H7 2025 11,460,000 5.000 4.370(1) 4423485J3 2026 34,180,000 5.000 4.480(1) 4423485K0 (1) Reflects yield to first optional call date, July 1, 2021.

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