The University of Hawaii has a monopoly on public higher education in the state.

LOS ANGELES -- The University of Hawaii Board of Regents plans a $189 million revenue bond sale Wednesday and Thursday.

The bonds received AA, Aa2 and A-plus ratings from Fitch Ratings, Moody's Investors Service and Standard & Poor's respectively. Fitch and S&P gave stable outlooks, while Moody's assigns a negative outlook.

The deal is comprised of five series, of which only $8.6 million is new money.

"Expense control will remain a critical credit challenge for FY 2016 as the university faces continued modest enrollment declines," according to Moody's analysts.

Bank of America Merrill Lynch and Morgan Stanley are co-managers of the deal that involves a seven-member syndicate. Orrick, Herrington & Sutcliffe is bond counsel. Alston Hunt Floyd & Ing and Katten Muchin Rosenman LLP are underwriter's counsel.

The sale includes $8.6 million university revenue bonds taxable series 2015A; $81 million university revenue refunding bonds series 2015B; $29.8 million university revenue refunding bonds taxable series 2015C; $18.2 million university revenue refunding bonds taxable series 2015D; and $51.9 million university revenue refunding bonds series 2015E.

The series 2015E bonds will have a forward delivery, expected in April 2016.

The retail order period is Sept. 9 followed by institutional pricing on Sept. 10 for the fixed rate bonds that have final maturities ranging from 2016 to 2044.

The final sale amount may change depending on market conditions for the refunding, and UH could issue up to $225 million, with only $8.5 million of new money, Moody's wrote in its Sept. 3 report.

Fitch analysts cited UH's low debt burden and expectations it will remain low due to a moratorium on new construction and a lack of legislative authorization for additional debt beyond this issuance.

 

 

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