Airports Airports Division Refinances Debt for Significant Savings, Provides Funds for Critical Projects at Historically Low Rates Kudos to the Airports Division which successfully refinanced $300 million of outstanding bonds for significant savings. In addition, the Airports Division took advantage of historically low interest rates in the municipal bond market to finance capital projects, delivering critical funding to advance projects that will maintain, preserve, and expand air service facilities across the State. The refinancing will generate over $100 million of savings over the next two years, providing an immediate reduction in costs that will help the Airports Division combat the challenges of COVID-19. The Airports Division also sold $300 million of new revenue bonds to fund essential capital improvement projects as HDOT continues to invest in the State’s airports. The bonds have an average interest rate of 3.35% with a final maturity in 2050. The interest rate on the bonds sold today represents the lowest interest rate ever achieved by the Airports Division.
By: Tim Sakahara
Despite the challenges of COVID-19, the success of today’s bond sale provides strong evidence of the market’s longterm confidence in Hawaii and our Airports System,” said Governor David Ige.
Prior to the bond sale, the Airports Division’s credit quality was reviewed by Moody’s Investors Service, S&P Global Ratings, and Fitch Ratings and received strong ratings of A1, A+, A+, respectively. The three rating agencies recognized the Division’s credit profile remains solid, noting that the Division entered the pandemic in a strong financial and operational position with an experienced management team and a history of well-managed capital planning, providing confidence the Division will be able to successfully navigate the decrease in air travel caused by COVID-19, which has significantly impacted the airport sector globally. Moody’s further noted its “expectation that demand for leisure travel to [Hawaii] remains relatively robust and will translate into stronger recovery when quarantine restrictions are relaxed.”
HDOT and the Airports Division continue to act strategically to reduce costs while also delivering strategic projects critical to the state. PAGE 9
