WAILUKU, MAUI, Hawai‘i – Finance Director Danny Agsalog today announced that low interest rates for Maui County have generated millions of dollars in savings for taxpayers. The lower interest rates are due to the County’s competitive bond sale of $68 million, which was sold on a premium with a net proceed of $75 million.
The competitive offering attracted strong bids from 15 underwriters in which J.P. Morgan LLC landed the lowest bid at a true interest costs (TIC) of 2.63%. According to Agsalog, out of the $75 million bond proceeds, $51 million will be used to fund for the new & ongoing capital improvement projects, and $24 million for refunding.
According to the latest bond market yields for 20-year bonds, the national average today is listed as 2.9. Today Maui County received a 2.63 rate.
“This low 2.63% is an incredible funding cost for the new projects,” Agsalog said. “Our refunding Series 2004 & 2006 bonds saved us $2.1 million.”
This is the second time that the County of Maui has offered it bond sale in a competitive method which has been considered the best practice in selling bond. In recent years only Maui County has sold its bond via competitive sale. Most offerings in the State of Hawaii have been through negotiated sale.
“It was an extremely successful competitive sale,” said Acting Mayor Keith Regan. “We surely landed lower than the market today. This is fantastic news for our taxpayers.”
The County of Maui was recently rated by Moody’s as Aa1 and by Fitch Rating and Standard & Poors as AA+ for this bond sale, which presently gives Maui County the highest bond rating in the State.
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