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CITY’S GENERAL OBLIGATION BONDS SELL AT HISTORIC LOW RATES
(Thurs., Oct. 25, 2012)—The City and County of Honolulu today successfully sold approximately $913 million of tax-exempt and taxable General Obligation Bonds at historic low rates, and refinanced older bonds to save taxpayers more than $75 million.
The bond proceeds will be used for mandated, required and essential projects and to refinance existing debt. The average interest rate on the tax-exempt bonds for new projects was 3.20 percent, the lowest rate in modern history. The $75 million savings will result from refinancing more than $625 million of General Obligation Bonds.
“This is a great day for
More than $2.7 billion of orders were received for the bonds, a record amount for the City. Strong demand resulted from the City’s comprehensive investor outreach effort, which included an internet-based presentation viewed by more than 35 major institutions, and in-person meetings and conference calls with institutional investors in
Investors noted the City’s “strong, stable financial condition” and “remarkably strong financial position with favorable reserve level trends.”
Bank of America Merrill Lynch served as the lead underwriter for the offering with Piper Jaffray & Co. as the co-manager. A one-day retail order period generated more than $140 million of orders from individual investors and their advisors. Local financial institutions were active participants in the bond issue.
Fitch Ratings and Moody’s Investor Services affirmed the City’s existing general obligation bond ratings at “AA+” and “Aa1” respectively — both with “Stable” outlooks, despite this generation’s worst recession. Fitch stated that “
Media contact: Louise Kim McCoy, Mayor’s Office, 768-7798.