MOODY’S INVESTORS SERVICE UPGRADES HDOT HIGHWAYS DIVISION BOND RATING
News release from HDoT, Nov 12, 2019
HONOLULU – The Hawaii Department of Transportation (HDOT) is pleased to announce that Moody’s Investors Service has upgraded the Highways Division’s bond rating to Aa1 from Aa2. The upgrade brings the Division’s bond rating to within one notch of the highest possible rating of Aaa.
“This is good news for Hawaii taxpayers who will see critical highway projects throughout the state delivered in a way that is financially prudent. Investment in our highway infrastructure is an important factor in providing a better quality of life for our residents, as well as supporting and growing Hawaii’s economy,” said Gov. David Ige.
The upgrade is well timed, as the Highways Division is set to sell revenue bonds this week in the bond market. “Proceeds of the sale will provide funding to advance critical projects that help preserve the Highway system and to improve safety,” said Director Jade Butay, Hawaii Department of Transportation.
The rating agency cited the Highway Division’s strong coverage of its annual debt obligations by pledged revenues, the diversity of the pledged revenue stream, and the State legislature’s demonstrated willingness to add new pledged revenues to fund the State’s highway program. Also noted was the strength of the State’s economy and effective HDOT management in maintaining a conservative debt portfolio.
Moody’s also noted the Highways Division’s growing focus on improved project delivery, recognizing that the Division reduced its unexpended federal highway aid balance from $950 million in federal fiscal year 2010 to $450 million in federal fiscal year 2019.
“We are delivering Highway projects faster and more efficiently, allowing us to bring down our unexpended federal pipeline and to ask for and receive more federal monies for Hawaii,” said Deputy Director Edwin Sniffen, Hawaii Department of Transportation Highways Division. “In addition to preserving and protecting the existing system, we are now focused on delivering new projects across the State, to alleviate congestion and improve quality of life.”
The rating upgrade was announced prior to the Highways Division’s upcoming 2019 revenue bond sale, scheduled for November 13th-14th, which is anticipated to raise $100 million for capital needs of the Highways System over the next several months, as well as to refinance existing bonds for interest cost savings.
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