S & P Assigns Aqua Pennsylvania 'AA-' Secured Debt Rating

Aqua America, Inc. (NYSE:WTR) announced today that Standard and Poor’s has assigned its ‘AA-’ secured debt rating and ‘1+’ recovery rating (1+ through 6) to the $80 million tax-free First Mortgage Bonds planned for issuance by the company’s largest subsidiary, Aqua Pennsylvania, Inc. Standard and Poor’s recovery rating of ‘1+’ indicates expectations for a full recovery of principal. According to Standard and Poor’s, the strong ratings reflect the consolidated credit quality of Aqua America. Aqua America believes that the ratings will help Aqua Pennsylvania (A+ corporate credit rating) continue to finance its capital investment program.

Aqua Pennsylvania received approval from the Pennsylvania Economic Development Financing Authority for the $80 million tax-free debt issuance which the company expects to price by year end 2008. The issuance will be used to finance capital improvements to water distribution systems and treatment facilities in Chester, Delaware and Montgomery counties in Pennsylvania.

Aqua America Chairman and CEO Nicholas DeBenedictis said, "I am pleased that despite the current nationwide credit environment, Aqua Pennsylvania has maintained its strong Standard and Poor’s ratings, which improve our borrowing opportunities. Our ability to maintain strong ratings has a direct and positive impact on our infrastructure investment program evidenced by the recently approved $80 million tax free debt issue we expect to price later this year.”

DeBenedictis went on to explain that reduced borrowing costs for its capital investments benefit customers. "Our customers benefit from the reduced borrowing costs, which minimize the amount of rate increases, as well as from the actual improvements to their water and wastewater systems.”

Aqua America, Inc. is a publicly traded water and wastewater utility with operating subsidiaries serving approximately three million people in Pennsylvania, New York, Ohio, North Carolina, Illinois, Texas, Florida, New Jersey, Indiana, Virginia, Maine, Missouri, and South Carolina. Aqua America is listed on the New York Exchange under the ticker symbol WTR.

This release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, the effect of the S&P credit rating on the company’s financing, borrowing power and capital investment program, the expected timing of the pricing of its tax-free debt issuance and the effects on customers of its capital investment program. There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including: general economic business conditions, unfavorable weather conditions, the success of certain cost containment initiatives, changes in regulations or regulatory treatment, availability and the cost of capital, disruption in the credit markets, the success of growth initiatives, and other factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007 which is on file with the SEC. We undertake no obligation to publicly update or revise any forward-looking statement.

WTRF