Bangkok--1 Sep--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'AA-' long-term rating to the City and County of Honolulu, Hawaii's nearly $120 million in senior lien wastewater revenue bonds, series 2009A, B, and C. At the same time, Standard & Poor's assigned its 'A+' long-term rating to Honolulu's $128.27 million junior-lien wastewater revenue bonds, series 2009A. Finally, Standard & Poor's affirmed its 'AA-' underlying rating (SPUR) on Honolulu's senior-lien bonds and its 'A+' long-term rating on the city's junior lien bonds. The outlook is stable.
"The rating reflects the wastewater system's diverse and largely residential service area, which comprises 72% of Oahu's population," said Standard & Poor's credit analyst Misty Newland. "The rating is further supported by the city's aggressive rate setting actions to support its capital spending requirements: It has a capital plan that includes $1.1 billion in financing through 2014. The city's timely responsiveness of rate setting actions in the event that additional regulatory improvements are required is critical to the maintenance of the rating."
The senior series 2009B bond proceeds will be used to refund outstanding debt, while series 2009A and C proceeds will provide financing for the system's capital plan. Series 2009C bonds may be issued as Build America Bonds or Recovery Zone Economic Development Bonds. The junior lien series 2009A proceeds will be used to refund the city's outstanding junior lien debt.
The wastewater system is faced with the challenges of upgrading, expanding, and rehabilitating parts of its collection and treatment systems, which have been vulnerable to breakages and overflow during peak wet weather conditions.
With roughly 900,000 residents, or 72% of the state's total population, Honolulu is Hawaii's center for economy, government, transportation, finance, and education. The City and County of Honolulu includes the entire island of Oahu and a number of outlying islands. The area's large military presence has thus far helped smooth business cycles related to tourism, largely originating from Japan and the mainland.
RELATED RESEARCH
USPF Criteria: "Standard & Poor's Revises Criteria For Rating Water, Sewer, And Drainage Utility Revenue Bonds," Sept. 15, 2008
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Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Misty Newland, San Francisco (1) 415-371-5073
Gabriel Petek, CFA, San Francisco (1) 415-371-5042
Key Contacts:
Americas Media Relations: (1) 212-438-6667
media_ [email protected]
Americas Customer Service: (1) 212-438-7280
[email protected]