Friday, March 29, 2024
Hawai'i Free Press

Current Articles | Archives

Wednesday, February 10, 2010
Hawaii sells $721.6M general obligation bonds
By News Release @ 7:11 PM :: 5218 Views :: Energy, Environment

STATE SELLS $721.6 MILLION IN GENERAL OBLIGATION BONDS

HONOLULU – Governor Linda Lingle announced today that the State of Hawai‘i successfully sold $721.6 million of general obligation bonds to fund various State capital projects, including public school facilities, University of Hawai‘i projects and other statewide capital projects. 

The $721.6 million bond sale included $500 million of taxable Build America Bonds authorized under the American Reinvestment and Recovery Act of 2009 to fund new capital improvement projects.  Due to very favorable market conditions and strong demand for the bonds, the size of the Build America Bond sale was increased from the planned $312 million to $500 million.  Unlike the traditional tax-exempt general obligation bonds, the State pays investors a higher taxable interest payment under the Build America Bonds.  However, the State receives an interest rate subsidy from the federal government when issuing the Build America Bonds which results in an overall lower cost to the State than traditional tax-exempt bonds.  The net interest rate on the Build America Bonds, after the interest rate subsidy from the federal government, was 3.27 percent.

The State also sold $221.6 million of tax-exempt refunding general obligation bonds at an average interest rate of 2.79 percent to refinance general obligation bonds currently outstanding, which will generate debt service savings of approximately $90 million in fiscal years 2010 and 2011.  Similar favorable market conditions and strong investor demand for the State’s tax-exempt bonds allowed the State to generate an additional $48 million of debt service savings in fiscal year 2012, in addition to the $90 million savings achieved in fiscal years 2010 and 2011.

Moody’s Investors Service, Standard & Poor’s Ratings Service and Fitch Ratings affirmed the State’s bond ratings of Aa2, AA and AA, respectively.

Standard and Poor’s Ratings Service cited one of the State’s credit strengths as, “the governor’s willingness to implement aggressive solutions to balance the fiscal 2010-2011 biennial budget given lower general fund tax revenue forecasts.”

“The State of Hawai‘i, like most other states, is faced with significant fiscal challenges due to the global and national recession,” said Governor Lingle. “We are very pleased that the bond rating agencies have recognized our efforts to address our budget issues in a responsible manner, protect our State’s credit rating and provide needed funds to support jobs for the construction and related industries.”

The municipal bond market has improved in the weeks leading up to the State’s bond sale and the timing of the sale resulted in significantly improved borrowing costs for the State.  The State’s sale was well received by a variety of investors, with significant demand from retail investors.  The sale received approximately $234.1 million in retail orders, many of which were from Hawai‘i residents.

“We were able to take advantage of this opportunity to borrow additional funds for construction projects at very attractive interest rates,” said Georgina Kawamura, director of budget and finance.

The bonds were sold by a financing team with Citigroup Global Markets Inc., serving as senior manager and Bank of America Merrill Lynch serving as co-manager.

####

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT