City sells wastewater bonds at low interest rate

HONOLULU – The City and County of Honolulu today successfully sold approximately $497 million of Wastewater System Revenue Bonds at an interest rate of 2.95 percent. More than $2.6 billion in orders were received for the $497 million in bonds from 71 institutions.

The attractive interest rate is attributed to the wastewater system’s strong financial position and affirmed credit ratings, saving ratepayers millions of dollars over the life of the bonds. Bank of America Securities, the city’s lead underwriter, noted investors highly valued the strong credit quality of the wastewater bonds. Meanwhile, the refinancing of more than $332.2 million in existing Wastewater System Revenue Bonds saved rate payers in excess of $77 million in future principal and interest payments.

New bond proceeds will help pay for important work on wastewater pump stations, pipe infrastructure, treatment plants, and other facilities through the wastewater system, and includes areas such as Ala Moana, Chinatown, ‘Ewa Beach, Iwilei/Kapālama, Kailua, Kāne‘ohe, Nu‘uanu, Sand Island, Honouliuli, and Wai‘anae.

Moody’s and Fitch rated the city’s senior wastewater revenue bonds “Aa2/AA,” and junior bonds “Aa3/AA-,” respectively, both with Stable outlooks. The ratings reflect the city’s strong service area, diverse economy, and ongoing rate support.

Bank of America Securities was the lead for the offering with Piper Jaffray & Co. as the co-manager. A retail order period for the bonds generated more than $196.4 million of orders from retail customers, both in Hawai‘i and on the continent. Local financial institutions also participated actively in selling and purchasing many of the bonds.

—PAU—