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FOR IMMEDIATE RELEASE
CITY OBTAINS FAVORABLE REFINANCE
As a result of the City’s strong AA credit ratings, Honolulu today was able to refinance approximately $323 million in General Obligation bonds and reduce its interest rate to an average of 3.9%.
Ivan Lui-Kwan, director, Department of Budget and Fiscal Services, said “This is the lowest interest rate we have ever earned in the City’s history and it will save City taxpayers millions.”
The City achieved the low rates because of its excellent credit rating which is one of the best in the nation, Lui-Kwan said.
In preparation for the City’s GO bond offering in New York, three leading bond-rating agencies affirmed Honolulu’s already strong credit rating.
Fitch said Honolulu’s “spending restraint, tax rate increase and creation of a rainy day reserve” are all examples of why Honolulu has retained its stable AA rating.
Moody’s Investment Service, which awarded Honolulu a rating upgrade last summer, stated that a “variety of cost cutting measures such as workforce reductions, department consolidations, hiring freezes and increasing self-support for enterprise activities have resulted in relatively flat expenditure growth over time. As a result, management’s commitment to maintaining budget balance and improving reserves has been increasingly evident and continues to be an important factor in Moody’s credit evaluation of Honolulu.”
Standard & Poor’s cited Honolulu’s “strong financial performance with solid fund balances…and a manageable debt burden.”
The City’s strong credit rating also created significant cost savings in premiums the City paid for bond insurance.
|Thursday, April 01, 2004|