The city, home of about 75 percent of the state’s 1.23 million residents, plans to sell $250 million in bonds next week to pay for capital projects, including improvements in parks and roads. In advance of the sale, Moody’s Investors Service raised its ratings on the bonds to AA2 from AA3 to reflect the city’s healthy economic performance.

Ivan Lui-Kwan, director of Honolulu’s budget and fiscal services, said the AA2 rating was the city and county’s highest in 10 years. The higher the rating, the less the perceived risk and the lower the interest rate that must be paid to attract investors.

About $145 million of the money is being used to refinance debt, while the remaining $105 million will finance projects such as road and sidewalk improvements, bike paths and public-safety improvements.

“We’re hoping what would happen through the sale itself is a reduction in the interest rates, principally because of the strong financial performance of the city,” Lui-Kwan said.

Lui-Kwan said the city has increased support for police, fire and emergency services.

In addition to the $250 million next week, the city plans to sell $150 million worth of general obligation debt in each of the next few years.

Earlier this week, Fitch Ratings assigned the bonds an AA rating, its third-highest level, and Standard & Poor’s gave the bonds its fourth-highest rating, AA-. The three bond-rating firms were hired by the city to evaluate the risk for lenders.