The state of Hawai‘i is putting its money to work.
The Hawai‘i Department of Transportation announced this week in a press release that the Airports Division has sold new airports system revenue bonds to deliver critical funding for projects that will continue to modernize and expand air service facilities across the state. At the same time, the Airports Division took advantage of low interest rates in the municipal bond market to refinance prior bonds for cost savings.
The new bonds will fund approximately $230 million of essential projects that will sustain the momentum of the Airports Division’s capital improvement program as HDOT continues to invest in the state’s airports. The bonds have an average interest rate of 3.44% with a final maturity in 2051. The interest rate on the bonds sold today represents one of the lowest interest rates ever achieved by the Airports Division, nearly surpassing the all-time low of 3.35% which was achieved in October 2020.
HDOT also successfully refinanced $57 million of outstanding revenue bonds for savings. The bonds that were refinanced were originally issued in 2011 with an average interest rate of 4.80% and a final maturity in 2024. The refinancing will lower the average cost to approximately 1.00%, reducing the debt service costs of these bonds.
“Air service is essential to Hawai‘i,” said Gov. David Ige. “The Hawaii Department of Transportation and the Airports Division continue to act prudently to deliver projects to modernize and expand our facilities while also taking advantage of opportunities to reduce costs. These actions are instrumental as we continue to adapt to the COVID-19 pandemic, and the success of today’s transaction demonstrates the market’s continued confidence in Hawaii and our Airports System as we build for the future.”
Morgan Stanley served as the lead managing underwriter for the bond sale, with BofA Securities as the co-senior manager. A Hawai‘i-based selling group was utilized to market the bonds to local retail investors.