Hawaii receives rating upgrades to general obligation bonds
HONOLULU – Governor Ige announced today that both Moody’s Investors Service and Standard & Poor’s upgraded the State of Hawai‘i’s general obligation (G.O.) credit rating to its highest ever bond ratings and the strongest credit position the state has ever achieved in its history. Moody’s upgraded its rating from Aa2 to Aa1 and Standard & Poor’s upgraded its rating from AA to AA+. Hawai‘i’s strong credit ratings will allow the state to reduce its borrowing costs to taxpayers through its upcoming bond sale.
The rating upgrades, done in conjunction with the state’s upcoming $750 million bond sale, recognize strong revenue and financial performance, continued fiscal prudence, restoration of state reserves and proactive measures taken to reduce unfunded liabilities pertaining to pension and health benefits. Both Moody’s and Standard & Poor’s had previously maintained positive outlooks on the state’s credit. In addition to these two credit upgrades, Fitch Ratings also affirmed its current rating of AA on the state’s G.O. bonds.
The rating upgrades reflect a multi-year effort during which the state effectively showcased its improved financial position and continued commitment to fiscal prudence and budgetary stability, a process which included multiple meetings with Gov. Ige and the rating agencies. With these rating actions, Hawai‘i becomes the only state to achieve multiple rating upgrades in 2016 and is also the only state to receive a rating upgrade this year from Moody’s Investors Services.
“The strong budgetary and financial policies that I have promoted and established, along with the actions taken by the Legislature, were recognized as very significant by Moody’s and Standard & Poor’s in their review of our credit rating. We have enhanced the financial stability of the state by addressing long-term pension and health fund liabilities and building-up the state’s reserve to better position the state to withstand future downturns in the economic cycles. Striving to live within our financial resources is something that we all do as individuals and something that we definitely must adhere to as a state,” said Gov. Ige.
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