Municipal Bond New Issues

RE: $557,520,000
CITY OF CHICAGO
SECOND LIEN WATER REVENUE PROJECT AND
REFUNDING BONDS, SERIES 2008

**** THIS ISSUE WILL BE IN BOOK ENTRY FORM THROUGH THE FACILITIES OF DTC ****

THIS IS A PRELIMINARY PRICING.

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MOODY’S: Aaa S&P: AAA FITCH: AAA
(CFM)(POSITIVE OUTLOOK) (CFM)(UPGRADE) (CFM)
UNDERLYING: A1 UNDERLYING: AA- UNDERLYING: AA

FSA INSURED

EXCEPT:
11/01/2009 MOODY’S: A1 S&P: AA- FITCH: AA
11/01/2038 MOODY’S: A1 S&P: AA- FITCH: AA

DATED: 04/16/2008 FIRST COUPON: 11/01/2008 DUE: 11/01

TAKEDOWN
MATURITY AMOUNT* COUPON PRICE (pts)

11/01/2009 UNINS 8,215M 4.00 % 2.00 1/4
11/01/2010 13,170M 5.00 % 2.50 1/4
11/01/2011 13,705M 5.00 % 2.78 1/4
11/01/2012 14,315M 4.00 % 3.08 1/4
11/01/2013 15,030M 5.00 % 3.24 1/4
11/01/2014 15,780M 5.00 % 3.41 3/8
11/01/2015 16,580M 5.00 % 3.57 3/8
11/01/2016 17,405M 5.00 % 3.74 3/8
11/01/2017 24,060M 5.00 % 3.92 3/8
11/01/2018 25,260M 4.25 % 4.06 3/8
11/01/2019 26,535M 5.00 % 4.21 3/8
(Approx. $ PTC 11/01/2018 106.667)
11/01/2020 21,150M 5.00 % 4.31 3/8
(Approx. $ PTC 11/01/2018 105.794)
11/01/2021 14,410M 5.00 % 4.41 3/8
(Approx. $ PTC 11/01/2018 104.929)
11/01/2022 15,130M 5.00 % 4.51 3/8
(Approx. $ PTC 11/01/2018 104.073)
11/01/2023 15,890M 5.00 % 4.61 3/8
(Approx. $ PTC 11/01/2018 103.225)
11/01/2024 16,680M 4.75 % 100.00 3/8
11/01/2025 17,520M 5.00 % 4.80 3/8
(Approx. $ PTC 11/01/2018 101.637)
11/01/2026 18,395M 5.00 % 4.87 3/8
(Approx. $ PTC 11/01/2018 101.059)
11/01/2027 19,310M 5.00 % 4.92 3/8
(Approx. $ PTC 11/01/2018 100.649)
11/01/2028 20,275M 5.00 % 4.97 3/8
(Approx. $ PTC 11/01/2018 100.241)

11/01/2033 102,770M 5.25 % 4.95 3/8
(Approx. $ PTC 11/01/2018 102.438)

11/01/2038 UNINS 105,935M 5.25 % 5.10 3/8
(Approx. $ PTC 11/01/2018 101.208)

CALL FEATURES: Optional call in 11/01/2018 @ 100.00

SINKING FUND SCHEDULE

2033 TERM BOND

11/01/2029 21,290
11/01/2030 22,360
11/01/2031 23,475
11/01/2032 17,390
11/01/2033 18,255

2038 TERM BOND

11/01/2034 19,170
11/01/2035 20,130
11/01/2036 21,135
11/01/2037 22,195
11/01/2038 23,305

* - APPROXIMATE SUBJECT TO CHANGE

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PRIORITY OF ORDERS AS FOLLOWS:
1. Illinois Retail
2. National Retail
3. Net Designated
4. Member

PRIORITY POLICY:

At least 3 firms must be designated.

No firm may receive more than 50% of any designation.

No firm designated may receive less than 10% of a designation.

A minimum of 40% of each designated trade must be designated among the WBE/MBE firms.

At least 2 WBE/MBE firms must be designated: (M.R. Beal & Company,
Cabrera Capital Markets and Gardner Rich & Company).

$1.00 of the takedown will be held back on each designated order, to be distributed at the discretion of the city.

Selling group members cannot be designated on non-retail bonds.

Selling group members cannot put in member orders on a non-retail bonds.

The bonds will be blue skyed in all states: including DC and Puerto Rico.

Preliminary official statements are available at www.onlinemunis.com

The Senior Manager will pay out all designations.

The Senior Manager requests the identification of all priority orders at the time the orders are entered.

There will not be any clearance fee taken from designated sales in accordance with MSRB Rule G-17.

There are to be no soft-dollar designations.

The managers reserve the right to terminate or extend the order period prior to or later than the above mentioned time and date and to confirm bonds at their discretion.

The compliance addendum MSRB Rule G-11 will apply.

The award is expected on Thursday, April 3, 2008.

Delivery is expected on April 16, 2008.

This issue is book entry through DTC.

UBS Securities LLC
M.R. Beal & Company
Cabrera Capital Markets Inc.
Gardner Rich & Co.
Morgan Stanley & Co. Incorporated

By: UBS Securities LLC New York, NY