FOR IMMEDIATE RELEASE                             October 28, 2005

Release M-87

HONOLULU GARNERS HIGH CREDIT RATINGS FOR UPCOMING BOND SALE

Honolulu continues to maintain high underlying ratings from the three major national bond rating agencies. This week, Moody’s Investors Services, Standard & Poor’s, and Fitch Ratings reaffirmed their confidence in the City’s financial management and its economic outlook.

Moody's and Fitch reaffirmed their previous Aa2 and AA ratings, respectively on the City's general obligation creditworthiness; Standard and Poor’s followed, rating the City a AA- with a Positive Outlook. Bonds rated in those categories are judged to be of a high quality by all standards.

In doing so, the rating agencies lauded the strong fiscal policies executed by Mayor Mufi Hannemann and his administration since he took office in January 2005.

In a press release, Fitch stated, "Honolulu’s credit strength rests in the sound fundamentals of its tourism-based economy, good financial operations and reserves, low debt burden, and strong fiscal management.”

Standard & Poor's recent release followed with, "The positive outlook reflects Standard & Poor's expectation that the current administration will continue to implement formalized, conservative financial controls and reserve targets, in order to provide stability.” Standard and Poor’s also cited the City and County’s “strong tourism base” and “manageable debt burden” as positive credit factors.

Similarly, Moody's stated, “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.”

Mayor Hannemann was pleased with the affirmations and expressed confidence in the City's management and financial condition.

“One of my highest priorities upon taking office was to get the city’s fiscal house in order,” the mayor said. “I’m satisfied we’re moving in the right direction, and I believe the bond raters see things the same way.”

The ratings follow a series of update meetings held between the rating agencies and top administration officials. At that time, they briefed the rating agencies on various aspects of Honolulu's government, including the implementation of management policies and expected financial results for fiscal 2005 as well as debt and economic conditions.

The ratings were requested in preparation for an upcoming $400 million general obligation bond that is expected lock in historically low borrowing rates. The bond sale is scheduled for Wednesday, November 2. The lead underwriter for the bond sale will be UBS Financial Services Inc, with Merrill Lynch also participating in the bond sale.               

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Contact:

              Bill Brennan, 527-6928

Mark Matsunaga, 527-5784