Hawai‘i’s Credit Rating Rises to Historic Levels
Gov. David Ige announced that Fitch Ratings upgraded the state’s general obligation (G.O.) bond rating (credit rating), from AA to AA+ — based on the state’s resilient economy and continued strong performance.
The upgrade, along with current ratings from Moody’s Investors Service (Aa1) and Standard & Poor (AA+) raises Hawai‘i’s G.O. bond credit ratings to the highest levels ever achieved in state history.
The high ratings will help the state reduce its borrowing costs and increase savings for Hawai‘i taxpayers in future bond sales.
Fitch is a private independent credit rating service that evaluates a bond issuer’s financial strength of its ability to pay back money owed. It cited Hawai‘i’s strong financial and operating performance, diversified economic base and the state’s overall fiscal prudence – including its commitment to reducing its pension and retiree healthcare liabilities. Fitch also acknowledged that the state has made strides in growing its budgetary and emergency reserves, which is a key step in improving overall financial stability.
“This is significant because we could potentially save millions in taxpayer dollars on interest payments. The state is also better positioned for the next recession, reducing the need to raise taxes or cut services,” Ige said. “My administration has actively promoted budgetary and financial policies to live prudently within our means, address our long-term liabilities and grow financial reserves. I must thank Budget Director Neal Miyahira who has helped to implement our policies and guide us to this point.”
“The bond rating upgrade reflects years of prudent financial management led by Governor Ige to improve the state’s overall financial position and address its long-term liabilities. It is important that we continue to implement similar financial initiatives to protect the financial health of the state,” said Neal Miyahira, director of the Department of Budget and Finance.”
With the latest rating upgrade from Fitch, all three of the state’s G.O. bond ratings are one notch away from the highest rating possible.