Tuesday, April 10, 2018

Hawaii Harbors Division Bonds Upgraded

By Karen Robes Meeks

The Hawaii Department of Transportation Harbors Division’s revenue bonds Series 2010 A and 2010 B’s rating was upgraded from ‘A2’ to ‘A1’ by Moody’s Investors Service, the department announced recently.

“The recent bond rating upgrade by Moody’s is great news and underscores the strong management and fiscal policies that continue to be the benchmark of my administration,” said Gov. David Ige. “I’m proud to say that this is the fourth revenue bond rating upgrade the HDOT Harbors Division has received over the past fourteen months.”

Moody’s said the Hawaii harbor system credit profile is based on the port system near monopoly position of serving seaborne cargo and cruise passengers in Hawaii, as well as “solid actual and projected debt service coverage ratios,” improved operating margins, DSCRs and liquidity from recent multi-year tariff raises and recent cargo and cruise passenger level stability.

The tariff raises in the last past several years represent “a strong management focus on financial performance and have led to substantial improvement in operating ratio and an increase in liquidity, providing financial flexibility to manage operational and financial challenges,” according to Moody.

The department has been able to use a cash-first, borrow-as-needed method of financing, allowing them to use unrestricted cash reserves to pay for its Capital Improvement Program projects and to re-deploy those resources typically associated with debt service payments for bonds issued to fund projects, said Department of Transportation Director Jade Butay.

“Our Harbors team has done an excellent job in setting priorities and implementing successful strategies to upgrade and improve our commercial harbor facilities throughout the state,” said Butay. “And they’ve accomplished this without the use of any State general funds; generating their own revenue through user fees and tariffs.”