LOS ANGELES — Hawaii's airport system received upgrades on its revenue bonds from two rating agencies and an improved outlook from a third ahead of plans to price $250 million this week.
Standard & Poor's and Moody's Investors Service raised the ratings on the airport systems senior lien airport revenue bonds a notch to A-plus and A1, respectively. S&P and Moody's raised the ratings on outstanding subordinate-lien certificates of participation a notch to A and to A2. Both assign stable outlooks.
Fitch revised the airport system's outlook to positive from stable and affirmed an A rating for the system's airport revenue bonds and an A-minus for the system's COPs.
The rating agencies cited the state's strong economy, the Hawaii Department of Transportation Airport Division's low debt burden and growth in enplanements for the upgrades and improved outlook.
"The rating action reflects our view of the system's consistently very strong liquidity, which management reports will be sustained, but also its moderately low debt burden and low cost structure," Standard & Poor's credit analyst Paul Dyson said in a statement.
Enplanements have grown by 12% since 2009 and 2.5% in 2015, Ross Higashi, the airport system's deputy director said during an online roadshow.
The monopolistic system operates 15 civilian airports on the Hawaiian islands.
The Hawaii Department of Transportation Airport Division has a retail order period planned for Wednesday with institutional sales to follow a day later.
The bonds will be sold in two series: $235.7 million Series 2015A subject to the alternative minimum tax and $11 million non-AMT.
Bond proceeds will fund part of the airport's ongoing capital improvement projects and pay $6.84 million in capitalized interest on the series.
Morgan Stanley, Bank of America Merrill Lynch and Barclays are the underwriters. Rounding out the finance team are LeighFisher as consulting engineer, Katten Muchin Rosenman LLP as bond counsel, and Public Financial Management as pricing advisor.
The airport has $808 million of outstanding airport system revenue bonds and $168 million of outstanding lease revenue certificates of participation.
"The ratings reflect the essentiality of air traffic to an island system of airports that generates a solid base of origination and destination traffic in a stable service area," according to Fitch.
