Categorized | Government, News

State of Hawai‘i sells $644.98 million in airport revenue bonds


HONOLULU – Governor Linda Lingle announced today that the Department of Transportation Airports Division successfully sold $644.98 million of revenue bonds to fund various capital projects for the State’s Airports Modernization Plan and to refinance existing debt to provide significant savings to airports statewide. Among the new projects to be financed with the proceeds of this bond sale is the new mauka concourse at the interisland terminal at the Honolulu International Airport.

In addition to providing funding for new capital projects, $166 million of refunding bonds were sold to refinance existing debt which provided approximately $24.5 million savings to the Airports Division. The municipal bond market has improved in the weeks leading up to this bond sale and the timing of the sale resulted in significantly improved borrowing costs and savings. The Airports Division last sold revenue bonds for new capital projects in 1990.

The sale was well received by a variety of investors, with significant demand from retail investors. The sale received approximately $100 million in retail orders, many of which were from Hawai‘i residents. The State was able to sell the bonds at a favorable interest rate of 4.89 percent.

Moody’s Investors Service, Standard & Poor’s Ratings Service and Fitch Ratings affirmed the Airports’ System bond ratings of A2, A- and A, respectively.

“We view favorably the system’s fundamental strengths, including its role supporting the visitor industry and its essential position providing transportation infrastructure within the island state,” Standard and Poor’s Ratings Service stated in its rating report.

“The Airports Modernization Plan is a major part of the State’s capital improvement stimulus plan that will create needed jobs and provide significant benefits to the approximately 82,000 visitors and residents who use our airports on a daily basis,” said Governor Lingle. “The improvements will increase the efficiency of the airports system and enhance the public’s travel experience at Hawai‘i’s airports.”

“The Airports Modernization Plan is a significant undertaking and the sale of these bonds is an important step towards completing the first phase of the improvements at our airports,” said Brian Sekiguchi, DOT deputy director, Airports Division, who is responsible for overseeing the operation and management of the State’s 15 airports. “It has been a collaborative effort with our airport partners to increase the operating efficiency of the airlines and all other concessionaires which ultimately will benefit the users of our airports.”

The bonds were sold by a financing team with Citigroup Global Markets Inc. serving as senior manager and Bank of America Merrill Lynch and Piper Jaffray & Co. serving as co-managers.

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