City and County of Honolulu, Hawaii
General Obligation Bonds
New Issue Report

From www.FitchRatings.com

Ratings / Rating Outlook

New Issues General Obligation Bonds, Series 2012A, 2012B, 2012C, 2012D, 2012E, 2012F, 2012G

AA+ / Stable

Outstanding Debt General Obligation Bonds

AA+ / Stable

New Issue Details

Sale Information: $890,400,000 General Obligation Bonds, Series 2012A, 2012B, 2012C, 2012D, 2012E, 2012F, and 2012G, selling the week of Oct. 22 via negotiation.

Security: Full faith and credit, supported by an unlimited pledge of ad valorem property tax.

Purpose: To fund various capital improvements and refund outstanding debt.

Final Maturity: Nov. 1, 2037.

Key Rating Drivers

Stable Economy: Honolulu’s economy has proven its stability over the long term, with ongoing growth in tourism activity despite periodic downturns. The city also benefits from its position as the state’s political and business center, in addition to substantial defense-related investments.

Strong Financial Flexibility: Ample reserves and demonstrated revenue-raising ability provide the city and county with the flexibility to manage both expenditure pressures and economic cyclicality.

Substantial Carrying Costs: Fixed costs for debt service and retiree benefits comprise a somewhat high and growing share of general fund spending.

Mixed Long-Term Obligations: Debt levels are low on a per capita basis and as a proportion of taxable assessed value, due in large part to the absence of overlapping entities, but funding levels for the state-sponsored pension system are notably low.