Posted at 4:15 p.m., Friday, March 16, 2007
Moody's issues rating on $350 million of state bonds
Advertiser Staff
Hawai'i's economy is showing some signs of slowing in line with national trends but most industries are continuing to show employment gains, according to Moody's Investors Service, which issued an Aa2 rating on $350 million of general obligation bonds that state government is expected to sell the week of March 28.The bond rating agency noted Hawai'i's economy outpaces the nation in terms of job gains and that unemployment has remained below national levels since 2001. It said the construction industry remains good despite a slowdown in residential building and that tourism is continuing to post strong and steady job growth.
"Recent indicators show some economic diversification, with increased employment in the service sectors outside of leisure and hospitality, underscoring the state's resilience despite a slow U.S. economic recovery," the report said.
"The state's strong economic performance, wit its heavy dependence on tourism, appears to be sustainable for the near term."
Not all of the report was positive, though.
Moody's noted Hawai'i's per capital debt burden is the second heaviest in the nation, in part because state government performs services that local governments handle in some other states. The reported noted about 10 percent of the state's general fund budget goes for debt service on general obligation bonds and that the funded ratio of the state Employees' Retirement System slipped in the past year.
It also said the state's liability for post-employment health benefits could be sizeable.
