Hawaii Credit Rating Upheld by Standard and Poor’s
Citing positive expectations for future economic trends in the state, three major rating agencies upheld Hawaii’s credit score in time for $800 million in new bond sales.
Standard and Poor’s Rating Service reaffirmed their “AA” rating, as did Fitch Ratings. Moody’s Investors Service upheld its “Aa2” grade for the state.
In justifying the ratings, all three agencies made note of Hawaii’s spendthrift fiscal policies, good liquidity, and positive year-end balances.
Commenting on the ratings report, Gov. Neil Abercrombie stated, “This reaffirmation by these agencies validates the progress that we have made as a state over the last two years.”
Although the reports were largely positive, several points of concern were raised by the three ratings agencies. They expressed apprehension over the state’s large pension system and poorly-funded retiree health benefit liabilities. All three agencies were also concerned with the potential impact of looming federal budget battles.
The ratings come as the state of Hawaii prepares to hold a pre-sale for state residents to allow tax exempt purchases of $800 million in new bonds.
Of the $800 million being issued, approximately half of the new money bonds will be used to fund capital construction projects. Those projects were already approved as part of the current state budget.
Hawaii will hold it’s pre-sale of the new bonds for state residents from Nov. 13-14. Interested persons should contact their financial advisor, or call the Department of Budget and Finance at 808-586-1518.