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APRIL 4, 2001


Mayor Jeremy Harris announced today that the City and County has retained it's excellent “double-A” (AA) score by the three major municipal bond rating agencies, and noted that this reaffirmation of Honolulu's fiscal health helped Paine Webber quickly sell out the City's recent $150 million General Obligation (“G.O.”) Bonds series 2001A and B.

“We're obviously pleased that our offering was so well received by investors,” Mayor Harris said. “We've been working to strengthen and diversify our economic base, and it's nice to see our efforts pay dividends in both our financial ratings and in the terms under which we are able to finance capital projects.”

The municipal bonds were sold at terms very advantageous to the city, thanks in no small part to “the improved perception of the city's credit by the bond rating agencies and the investment community,” according to Paine Webber's Mutual Securities Group Director Frank X. Lauterbur, commenting from Los Angeles.

Lauterbur cited “the city's renewed economic vitality, especially the strength in the real estate and construction sectors. Additionally, the city's initiatives for the visitor industry, notably the revitalization of Waikiki, clearly have shown results with increased occupancy and daily room rates.”

“We should all be pleased that our strong fiscal position has been confirmed by the major bond agencies,” Mayor Harris stated. “Moody's, Standard and Poor's, and Fitch IBCA Duff and Phelps all reaffirmed our high rating, citing Honolulu's improving economic health and the initiatives which my Administration has undertaken to support business, and particularly our vital visitor industry.”

“The City and County is managing its resources well, and has been able to weather the rough times this past decade without any major tax or fee increases, cuts in government services or layoffs. Honolulu's outlook for the 21st Century is brighter than ever: the economy is rolling and tourism is expanding once again, and consumer and investor confidence continues to improve.”

The city was able to finance the G.O. Bond offering at an all-in cost of just 5.05% for 25 years, and additionally inserted a provision that allows the bonds to be called in 10 years with no pre-payment penalty, the first time in Honolulu's history that a bond offering contained such an advantageous clause; the normal prepayment penalty for municipal bonds is 1% or 2%. And since the bonds were sold without deep discounts, as was necessary in past offerings, the city will likely be able to refinance the bonds in the future and re-capture more savings.

Tuesday, February 26, 2002

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