Hawaii sells bonds after 'strong demand'

After receiving AA+ and Aa2 credit ratings, Hawaii government officials moved forward with the $800 million general obligation bond offering to help raise capital for infrastructure projects.

Governor David Ige, who has been instrumental in the state’s participation in selling GO bonds annually since 2015, said the sale and the credit rankings continue to be positive indicators of the state’s financial wellness despite the challenging conditions resulting from the COVID-19 pandemic.

“Hawaii was able to generate strong demand for its bonds,” added Ige in a news release. “This demonstrates the market’s continued confidence in the State’s ability to prudently manage its long-term financial responsibilities.”

The bond sale officially started on Oct. 19. According to the governor’s release, officials met with both local and off-island investors to sell the bonds. As a result of these meetings, bids were placed for over $1.5 billion in bond orders, of which $800 million were officially sold.

Prior to the sale, Ige and other state officials visited credit analysts at Moody’s Investors Services and S&P Global Ratings to look at the state’s overall credit standing. After reviewing the state’s credit outlook based on the current financial health of the state, Moody’s and S&P gave Hawaii a ranking of Aa2 and AA+, respectively.

Major factors that contributed to the positive scores included Hawaii’s economic performance, the state’s ability to rebuild its rainy day funds and the state’s ability to increase its post-employment and pension contributions, which are indicators of a strong state economy, according to the press release.

“Both agencies cited 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 the State’s strong bond ratings,” the governor’s office said.

Since 2015, Hawaii has been able to use general obligation bond sales to help boost its financial reserves and support government programs for housing, recreation, education, and infrastructure. The largest GO bond sale seen for Hawaii remains last year’s, when $1.88 billion were sold in 2021 to financially support the state’s government-funded projects.

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