By Karen Robes Meeks
The Hawaii Department of Transportation recently earned a 'AA-' rating from Fitch Ratings on its $160.3 million of outstanding harbor system revenue bonds, with a rating outlook of “stable.”
While the port's outstanding debt balance is expected to rise in the short term with the anticipated borrowing of $260 million next fiscal year, leverage will remain supportive of the current rating given the port's high liquidity levels.
“Despite a sizeable capital plan that calls for additional borrowing, the harbor system is expected to maintain its historically robust financial profile with strong coverage, relatively low leverage, and high liquidity providing over 1,000 days cash on hand,” the report reads.
The port system has a natural monopoly on serving the Hawaiian Islands, offsetting the system’s exposure to tourism industry fluctuations. It also benefits from positive revenue trends from stable volume growth and an enacted tariff rate mechanism.
