South Carolina Government Finance Officers Presentation to 2010 Fall Conference October 18, 2010

BABs & RZEDBs Market Dynamics and Trends Program Update Program Summary, Proposed Legislation and Outlook Offer municipal issuers access to taxable buyer base and reduced costs, particularly at long maturities Over $129bn issued to date, comprising about 27% of total municipal issuance during the same period The current legislation expires at the end of 2010 The extension of the programs is still unclear In June, Congress failed to pass a Jobs Bill which would have extended the BAB programs through December 31, 2012 at reduced subsidy of 32% and 30% in 2011 and 2012, respectively The prospects of the ARRA programs are currently unclear Issuers have to decide to issue BABs and RZEDBs before the expiration and grapple with unknowns including a likely lower rebate level if an extension does pass 2010 issuance is expected to remain strong around $100 billion, with likely surge of volume near the year end when the current legislation expires Steady monthly volume Increased knowledge and acceptance of municipal credits by traditional taxable investors Continued demand for long duration BABs & RZEDBs from pensions and insurance firms to offset liabilities

Overview of BABs Issuance to Date (1) Call Features – 30% with Par Calls Size – Majority under $250 Million Volume – Over $129Bn Since Inception Maturities – 63% over 22 Years BABs & RZEDBs Market Dynamics and Trends ____________________ (1)Source: Bloomberg and Thomson Reuters. Data as of 9/13/2010. Billions Number of Deals

Overview of Issuance to Date (1) Ratings – 68% with AA or HigherSectors – Broadly Diversified BABs & RZEDBs Market Dynamics and Trends ____________________ (1)Source: Thomson Reuters. Data as of 8/6/2010. (2)Based on a large, highly rated, GO BAB issue. Typical Investor Distribution (2) ~ 50% Are Traditional Municipal Bond Buyers: Mutual Fund (i.e. Bond Fund) Investment Advisory (with tax-exempt market research capacity) Property Casualty Insurance Company Retail ~ 50% Are Non-Traditional Municipal Bond Buyers Life Insurance Company Investment Advisory Foreign Banks Pensions Hedge Funds Corporation * - Hedge Funds, Governmental, Pensions

BABs Market Dynamics and Trends Top BABs Holders (1) ____________________ (1)Source: eMAXX as of 6/30/10

Muni-Style 10-Year Par Call vs. Corporate Style Make-Whole Call BABs & RZEDBs Market Dynamics and Trends

Municipal Spreads and Ratios ____________________ (1)Source: Bank of America Merrill Lynch. BAB Spreads Are Grinding Tighter in the Past Weeks (1) Muni Credit Spreads to AAA (1) Ratios Are Above Averages Market Update

Syndicate Dynamics – Typical Timeline and Process Tax-Exempt vs. Taxable Syndicate - 1 Week Mailing of POS Rating Reports Investor Presentations Posted -2 to 3 Days Mailing of POS Rating Reports - 1 Day 0 Retail Order Period +1 Day -1 to 2 Days Tax-Exempt Syndicate Taxable Syndicate (including BABs & RZEDBs) Preliminary & Final Pricing Formal Award Formal Guidance Launch Pricing Set Coupons/Formal Award Whisper Talk Preliminary Guidance Investor Presentations Posted Addressing Dual Marketing Plans Investor Conference Call (If Needed)

Patriots Energy Group, Gas System Revenue Bonds, Series 2010 A&B Yield Model for Selecting Uninsured Tax-Exempt (A2)Versus Uninsured RZEDBs (A2) Maturities Market as of July 8, 2010