LOS ANGELES —Honolulu achieved a 3.89% interest rate on $699 million in wastewater revenue bonds it priced on Wednesday - the second lowest interest rate it has achieved over the past 17 years, according to city officials.
The pricing drew $1 billion in orders.
Honolulu officials attributed the attractive interest rate to the wastewater system's strong financial position and affirmation of the Double-A credit ratings. The lowest previous tax-exempt rate secured by the City was 3.71% in 2012.
The refinancing of roughly $542 saved Honolulu more than $50 million in long-term interest payments, officials said.
The proceeds will help pay for work on wastewater pump stations, pipes and facilities in Ala Moana, Chinatown, Kailua, Kalihi, Kaneohe, Manoa, Nuuanu, Palolo, Sand Island, Honouliuli, Wahiawa, Waimalu and other neighborhoods to help the region meet state and federal clean water mandates.
Moody's Investors Service and Fitch Ratings rated the city's wastewater revenue senior bonds Aa2 and AA respectively, and junior bonds Aa3 and AA-minus respectively.
Bank of America Merrill Lynch was the lead underwriter for the offering with Piper Jaffray & Co. as the co-manager. A retail order period Tuesday generated more than $275 million of orders from retail customers, both in Hawaii and on the mainland. Local financial institutions also participated actively in selling and purchasing many of the bonds.
