Maui Business

Newly sold bonds will fund $230 million for essential airport projects in Hawaiʻi

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File photo of Kahului Airport. Photo Credit: Wendy Osher

The Airports Division of the Hawaiʻi Department of Transportation has sold new airports system revenue bonds to fund approximately $230 million of essential projects to modernize and expand air service facilities across the state. 

The Airports Division also took advantage of low interest rates in the municipal bond market to refinance prior bonds to lower costs. 

The bonds have an average interest rate of 3.44% with a final maturity in 2051. The interest rate on the bonds sold today represents one of the lowest interest rates ever achieved by the Airports Division, nearly surpassing the all-time low of 3.35% achieved in October 2020.


HDOT also refinanced $57 million of outstanding revenue bonds for savings. The refinanced bonds originally were issued in 2011 with an average interest rate of 4.80% and a final maturity in 2024. The refinancing will lower the average cost to approximately 1%, reducing the debt service costs of these bonds.

In preparation for the bond sale, the Airports Division’s management team led an extensive marketing campaign, highlighted by a live virtual presentation by senior representatives of the State, HDOT and the Airports Division. 

In attendance were investors representing some of the largest accounts in the United States who buy municipal bonds. The Division also released an online presentation for local and national investors and further targeted Hawaiian investors with digital advertising on local websites. 


“Air service is essential to Hawaiʻi,” Gov. David Ige said.  “The Hawaiʻi Department of Transportation and the Airports Division continue to act prudently to deliver projects to modernize and expand our facilities while also taking advantage of opportunities to reduce costs. These actions are instrumental as we continue to adapt to the COVID-19 pandemic, and the success of today’s transaction demonstrates the market’s continued confidence in Hawaii and our Airports System as we build for the future.”

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, each of whom affirmed the Division’s strong bond ratings of A1, A+ and A+, respectively. 

S&P raised the Division’s outlook to “Positive” from “Stable,” citing the recovery of domestic US travelers to pre-pandemic levels, proactive measures taken by Division management, and the State’s long-term financial planning and resiliency as materially positive credit factors. 


Moody’s and Fitch both assigned “Stable” outlooks to the bonds, with Moody’s recognizing the Airports Division’s “strong financial flexibility to manage COVID-related pressures as passenger levels trend toward full recovery.” 

Morgan Stanley served as the lead managing underwriter for the bond sale, with Bank of America Securities as the co-senior manager. A Hawaiʻi-based selling group was utilized to market the bonds to local retail investors.


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