Hawaii on Tuesday priced general obligation bonds for the first time in half a year, in a deal state officials said they had upsized due to strong retail demand.
In all, the state priced $725.3 million of GO bonds, including $500 million in new money and $225.3 million for refunding purposes.
State officials said the sale received approximately $200 million in retail orders, allowing the transaction to be upsized.
“The new-money portion of the sale was increased in size to $500 million from the $400 million originally planned due to strong investor response and demand for the bonds,” Georgina Kawamura, director of finance, said in a news release. “The ability to sell the increased amount of bonds provided the state with an excellent opportunity to borrow additional funds at favorable interest rates.”
Bonds from the new-money series were priced with yields from 2.3% for 2013 maturities to 4.72% for 2029. Refunding bonds priced to yield between 2.66% for 2014s to 3.72% for 2019 maturities.
The state’s budget has been pinched by the recession and a related decline in tourism, Hawaii’s main industry. The refunding was structured to save the general fund $100 million in debt service costs in both fiscal 2010 and fiscal 2011.
The state carries double-A level ratings from all three ratings agencies, though Fitch Ratings revised its outlook to negative ahead of the issue. Citi ran the books on the deal.