Moody’s Improves State Bond Outlook

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Moody’s Investor’s Service has given the State of Hawai’i an improved outlook on its general obligation bonds by pushing its ranking up from stable to positive.

An estimated $750 million bond sale recognizes the restoration of state reserves and proactive measures that have been taken to reduce unfunded liabilities pertaining to pensions and health benefits.

The state’s strong bond ratings and improved outlook are expected to allow the state to reduce costs to taxpayers.

Hawai’i’s G.O. bond rating was also affirmed by S&P and Fitch with an “AA” rating with stable outlooks, stating the state’s adherence to sound fiscal policies, financial management, and demonstrated commitment to building and maintaining strong reserve levels.


These recent ratings are just ahead of Governor David Ige’s administation’s first G.O. bond sale. The bond sale will provide funding for infrastructure improvement and other needed capital projects that will support the state’s economic growth and provide facilities for the people of the state.

Governor Ige’s administration’s sale will begin Wednesday, Oct. 14 and will refinance bonds previously issued at higher interest rates, refunding more than $50 million.

“We have undertaken several initiatives to improve the financial outlook of the state. This bond sale will benefit from the state’s strong financial foundation established through the joint efforts of the Ige administration, the legislature, and other stakeholders,” stated Wesley Machida, State Director of Finance, who is overseeing the sale of the G.O. bonds.


The 2015 G.O. Bonds are expected to be sold during a retail-only order period on Wednesday, Oct. 14, with an institutional order period to follow on Thursday, Oct. 15.

The sale will include approximately $750 million of bonds in total, including a mixed use of proceeds:

  • Tax-exempt Series ET will include $190 million of bonds for general State projects.
  • Tax-exempt Series EU will include $35 million, which will be designated as Green Bonds for the Turtle Bay preservation easement, pursuant to Act 121, SLH 2015.
  • Tax-exempt Series EV, EW, EX EY & EZ will include approximately $500 million for an economic refinancing of outstanding bonds.

Taxable Series FA will include $25 million for general State projects, subject to private activity.


The 2015 G.O. Bonds will pay semi-annual interest and will be sold in denominations of $5,000, or multiples thereof; and will be exempt from Hawai’i and federal income taxes, with the exception of the series FA bonds, which will be subject to federal taxes.

Bank of America Merrill Lynch will serve as the lead underwriter for the offering, with Citigroup and Morgan Stanley serving as co-senior managers and Goldman Sachs and RBC serving as co-managers.

A Hawai’i-based selling group will also be utilized to market the bonds to local retail investors.

Anyone interested in purchasing the bonds should contact their broker at any member of the underwriting team or selling group.

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