Hawaii has closed on the sale of $800 million of general obligation bonds that will provide critical funding to support new and existing infrastructure projects.
“We are very pleased with the results of the bond sale,” Gov. David Ige said in a release from his office. “Despite challenging conditions in the broader bond markets this year, Hawaii was able to generate strong demand for its bonds. This demonstrates the market’s continued confidence in the state’s ability to prudently manage its long-term financial responsibilities.”
According to the release, prior to the sale, Ige and senior state administrators met with analysts from Moody’s Investors Service and S&P Global Ratings to review the state’s credit quality. Following these presentations, Moody’s and S&P affirmed the Hawaii's bond ratings of Aa2 and AA+, respectively, with stable outlooks.
The agencies pointed to the state’s robust economic performance coming out of the COVID-19 pandemic, healthy financial position and long track record of careful fiscal management as key strengths that support Hawaii's strong bond ratings.
“The state has a long track record of conservative debt management practices,” Moody’s said in its report, according to the release. “Hawaii’s recent rebuilding of its rainy day fund and steps taken to increase its pension and OPEB contributions also evidence prudent management.”
The state of Hawaii under the Ige administration has significantly increased its financial reserves and paid down its long-term liabilities, while simultaneously supporting critical investments in workforce housing, education, and infrastructure, along with other important priorities, the release said.
Director of Finance Craig Hirai and the Department of Budget and Finance led an extensive marketing campaign in preparation for the bond sale that took place Oct. 19. Officials conferred with local on-island investors. They also hosted a live virtual presentation to investors representing some of the largest institutions across the country that buy municipal bonds.
The state also released an online presentation to further reach investors. As a result, local, national, and international investors collectively placed more than $1.5 billion of orders for the bonds, according to the release.
Morgan Stanley served as the lead managing underwriter for the bond sale, with BofA Securities and Citigroup as co-senior managers, and Jefferies and RBC as co-managers. A Hawaii-based selling group was also utilized to further market the bonds to local retail investors.