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CITY’S GENERAL OBLIGATION BOND RATINGS AFFIRMED
(Fri., Oct. 19, 2012)—Mayor Peter Carlisle today announced that Moody’s Investor Services and Fitch Ratings have affirmed the City and County of Honolulu’s existing general obligation bond ratings at “Aa1” and “AA+” respectively—the second highest possible ratings for municipal bonds.
In addition, both rating agencies affirmed the City’s “Stable” outlook. Moody’s said, “The Aa1 rating primarily reflects the city’s large economic base, above average resident wealth, and sound financial operations with recently improved reserve levels, as well as manageable debt profile.”
Of particular note, Fitch cited the City’s stable economy and strong financial flexibility, stating that “Honolulu’s economy benefits from a resilient visitor industry that has maintained strength throughout periodic downturns. . . The city’s non-tourism economy is also substantial and balances tourism’s inherent volatility.” Fitch went on to report that “Honolulu’s financial flexibility is aided by its large tax base and flexible provisions for increasing property tax revenue.”
“This is great news for the City, and shows that our financial foundation is solid,” said Mayor Carlisle. “Prudent financial management continues to be a hallmark of this administration.”
“Maintaining strong bond ratings saves money by enabling the City to borrow at lower interest rates for essential capital improvements,” said Department of Budget and Fiscal Services Director Michael Hansen.
The City is moving forward with the sale of approximately $890 million of General Obligation Bonds, Series 2012 ABCDEFG. The Series 2012 A bonds are being issued to finance various capital improvement projects in the City. The Series 2012 BCDEFG refunding bonds are being issued to refinance certain outstanding general obligation bonds for debt service savings. All of the bonds will be exempt from Hawaii income taxes but some of the series will be subject to federal taxation.
A special opportunity is being offered for Hawaii residents to place orders for the bonds in advance on Wednesday, October 24th. The sale is expected to be completed on Thursday, October 25th. Bank of America Merrill Lynch will serve as the lead underwriter for the bond sale with Piper Jaffray & Co. serving as the co-manager. For more information, please contact your broker or refer to the City advertisement that appeared in the October 18th edition of the Honolulu Star-Advertiser.
Media contact: Louise Kim McCoy, Mayor’s Office, 768-7798.