State sells record $1.88B in general obligation bonds

Gov. David Ige announced Thursday that the State of Hawaii has sold a record $1.88 billion in general obligation bonds.

Money from the sale will be used to fund new and existing projects, according to Ige.

“This bond sale will provide ongoing funding for critical state construction projects including schools, highways, airports and harbors. These investments improve services for the people of Hawaii, create jobs that strengthen our communities, and contribute to the state’s economic recovery as we look beyond the pandemic,” said Ige in a press release.

Prior to the bond sale, Ige and the state’s finance team met with the three primary credit rating agencies (Fitch, Moody’s, and Standard and Poor’s). As a result of the presentation, Moody’s affirmed the state’s Aa2 rating and revised the outlook for the State of Hawaii to positive, which reflects “a significant turnaround in the state’s economic and financial position,” according to Moody’s report.

S&P affirmed the AA+ rating and revised the outlook to stable, saying that “the outlook revision reflects our view that despite the country’s strictest pandemic response measures and continued controlled reopening of its economy, Hawaii’s economic momentum has shifted sufficiently upward to provide a more manageable operating environment.”

Fitch also affirmed its AA rating with a stable outlook for Hawaii.

The state’s extensive marketing efforts included live investor presentations held via video conference. Over 120 institutions placed over $8 billion of orders for the bonds – a record number of orders for the state. Bonds were also purchased by residents and local institutions as well as a number of international investors.

Additionally, the advance refunding that refinances part of the state’s existing debt, will generate $76.8 million in present value savings.