Gov. Linda Lingle's office said yesterday that the state sold $725.3 million of general obligation bonds to fund various capital projects, including public school facilities, University of Hawaii projects and other capital projects statewide.

The $725.3 million bond sale included $500 million of new money proceeds to fund new capital improvement projects and $225.3 million of refunding bonds to refinance outstanding debt.
The refinancing of existing debt resulted in a reduction in debt service of approximately $100 million per year in fiscal years 2010 and 2011. The overall interest rate for the bonds was 4.12 percent.
Moody’s Investors Service, Standard & Poor’s Ratings Service and Fitch Ratings affirmed the Hawaii’s bond ratings of Aa2, AA and AA, respectively.
Standard & Poor’s Ratings Service cited, as one of the state’s credit strengths, “management’s well-established, proactive budget monitoring practices, including frequent revenue forecast updates from the Council on Revenues, which facilitates prompt identification of potential budget adjustments.”
“The current economic climate posed significant challenges to the State in issuing these bonds. However, we were able to maintain our high credit ratings and our bonds were well received by the bond market,” Lingle said in a statement.
The municipal bond market has stabilized since the market disruption in September 2008. The state’s sale was well received by a variety of investors, with significant demand from retail investors. The sale received approximately $200 million in retail orders, many of which were from Hawaii residents.
The bonds were sold by a financing team with Citigroup Global Markets Inc., serving as senior manager and Merrill Lynch serving as co-manager.