LOS ANGELES -- Maui County, Hawaii will go competitive when it sells $70.1 million in general obligation bonds on Oct. 30.
The county decided to use a competitive process because of the level of interest it was seeing from underwriters, said Maui County’s financial advisor, Curt de Crinis of Glendale, Calif.-based C.M. de Crinis & Co. Inc.
The deal comes with double-A ratings across the board from the three major ratings agencies, Danny Agsalog, the county finance director, said in a statement.
“The county’s financial condition is very strong and we hope to get a number of attractive bids,” Agsalog said. “I believe we are the only issuer in Hawaii with AA-plus ratings from all three rating agencies.”
The bonds will be sold in two series, with $46 million in new money to build a police station and a $32 million refunding.
“The county is also under new administration and they were attracted to the transparency going through the competitive process,” de Crinis said.
Maui used two underwriters – Piper Jaffray & Co. as senior manager and RBC Capital as co-manager – when it priced $74 million in GO bonds in 2010.
In recent history, negotiated deals have outpaced competitive bidding as the preferred method of sale in the bond market, but not necessarily as the best way to sell double-A rated GO bonds, de Crinis said. Since the beginning of the year, he said, over 50% of double-A bonds in the $50 million to $125 million range have been bid competitively.
The Government Finance Officers Association recommends that highly-rated GO bonds be competitively bid, he said, because historically the results turn out better in terms of interest rates. Maui officials are hoping for a 2.5% interest rate or better on the bonds that will have a 20-year maturity.