LOS ANGELES -- Honolulu has announced plans to price up to $300 million in sewer bonds Thursday to help fund a $3.5 billion long-range capital improvement plan.
The sale will be split between up to $150 million in new money debt and up to $150 million to refund existing wastewater revenue bonds.
The bonds will be marketed for retail sale Wednesday before Thursday’s institutional pricing.
The proceeds will finance repairs and upgrades 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, according to Markus Owens, spokesman for the city’s Department of Environmental Services.
Moody’s Investors Service and Fitch Ratings rated the city’s wastewater revenue bonds Aa2 and AA respectively in October 2011. Moody’s analysts lauded the city in 2011 for adopting substantial rate increases in advance of the city’s substantial borrowing for its $3.5 billion long-term capital program that extends to 2020. Rates are projected to increase 4% annually between fiscal 2012 and 2015.
The improvements and upgrades in the city’s long-term plan came about as part of a consent decree in 2010 between the federal Environmental Protection Agency, the state Department of Health and several non-profit environmental groups as to how the city would meet evolving discharge standards regarding wastewater treatment.
Bank of America Merrill Lynch will serve as the lead underwriter for the offering, with Piper Jaffray & Co. serving as a co-manager.