Bond Ratings Improve for DOT Airport Division

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Moody’s Investors Service and Standard & Poor’s Rating Services recently upgraded the Hawai’i Department of Transportation Airports Division’s bond ratings.

The rating from Moody’s increased from A2 to A1 with a stable outlook, while Standard & Poor’s rating was upped to an A+ from an A with a stable outlook.

Fitch Ratings held the state’s Airport Division at an A rating with a bond outlook from stable to positive.

Major factors for the increases across the board were the Airport System’s monopoly of commercial air travel, continued strength in financial performance, and strong passenger growth trends.


“The credit rating upgrade will allow the state to improve the guest experience for airline passengers at a lower cost,” said Governor David Ige. “The Airports system is the gateway to Hawai’i, and its long term success is critical to the future of the State.”

With a lower borrowing rate for current and future bond issues, the Airports Division will continue to work with the airlines to improve airport facilities and enhance the overall passenger experience.

“This is very positive news and will benefit Hawaiian Airlines and all other carriers and airport users who are responsible for financing airport modernization,” said Mark Dunkerley, Chief Executive Officer and President of Hawaiian Holdings, Inc. “We appreciate the dedication and efforts by the Airport Division’s management team to achieve this upgrade.”


Ford Fuchigami, DOT Director, says that in preparation of the rating programs, it was clear that the state needed to show a strong financial position that would be sustained throughout the capital improvement program.

Ratings from Moody’s and Standard & Poor’s were announced right before the Airport Division’s first revenue bond issuance in the past four years. The revenue bond issuance will fund $250 million for the next phase of the Airports’ modernization program.

The 2015 Bonds are expected to be sold with a retail-only order period on Wednesday, Nov. 4, with an institutional order period to follow on Thursday, Nov. 5


Semi-annual interest will be paid on the 2015 ponds, which will be sold in denominations of $5,000 or multiples of. The 2015 bonds will be exempt from Hawai’i and federal income taxes, but will be subject to the alternative minimum tax.

Anyone interested in buying bonds should contact their broker, Morgan Stanley, the lead underwriter for the offering; Bank of America, Merrill Lynch, or Barclay, which are serving as co-senior managers.

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