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additional $175 million of bond cash proceeds to fund half of the construction project at the debt repayment level just above or at the same level in 2019 and 2020. What is remarkable is Kendrick has incredible credibility with Fitch Ratings and Moody’s Investor Service, the rating agencies for Harbors bonds. These agencies analyze the financial results and projections of the Harbor Division’s revenues and expenses to determine a credit rating and outlook for the Harbors bonds. Interestingly, Moody’s Investor Service requested for its recent ratings analysis, Kendrick’s detailed financial workpapers (Excel worksheets) to conduct a stress test of the Harbors Division’s financial forecast, in light of the COVID-19 pandemic, to determine if there were any flaws in the forecast. The result of the Moody’s Investor Service stress test and their rating analysis as well as the rating analysis performed by Fitch Ratings is that both credit rating agencies reported no change in the Harbors Divisions’ high-grade ratings of AA3- and AA- and assigned “stable outlooks” on the future outlook of the Harbors Division’s finances, all in spite of the negative financial impacts caused by the COVID-19 pandemic. Backed by Fitch Ratings and Moody’s Investor Service high-grade ratings, the demand for the 2020 Harbors Division Revenue Bonds was tremendous, measured by the high demand for these harbor bonds compared to the available supply of the bonds. The market demand was 13 times the amount of supply that resulted in investors willing to take less yield for the bonds. The high-grade ratings allowed these 2020
Harbor Division Revenue Bonds to be issued with a shorter term than customary bonds, i.e., 20-year bonds were issued as opposed to the customary 30-year bonds, which coupled with the high-grade ratings resulting in saving the Harbors Division total debt repayments over the 20-year bond term of approximately $62.2 million, which includes reduced interest costs of approximately $49.7 million. Mahalos! In serving the public and constructing important infrastructure for the residents and harbor customers like HHUGS, we wish to spotlight Kendrick and to say thanks to all in Harbors fiscal, property management and to each of the district personnel in operations that generate revenue and collect the cash, as well as the Harbors Engineering staff and former HDOT Deputy Director for Harbors Darrell Young and current HDOT Deputy for Harbors Derek Chow, who contributed to the 2020 Master Plan to build Kapalama Container Terminal. We are finally able to meet HHUGS need for added container yard capacity, delivering a conceptual plan idea from design through construction, and turning it into a functional reality. As Kendrick has said during ZOOM meetings conducted for the purpose of executing this 2020 Harbors Revenue Bond transaction, it takes all of us on the Harbors Team, including Director Jade Butay, DBEDT, B&F and the Harbors legal and financial advisors to “make this bond sale and the projects that are being funded a reality.” Mahalo to all!
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