Aloha State News

The Hawai‘i Department of Transportation (HDOT) has announced an upgrade in the bond rating for the state Airports System by Moody’s Investors Service. The rating was increased to Aa3 from A1 ahead of an upcoming bond issuance.

Moody’s highlighted several factors contributing to this upgrade, including strong passenger traffic performance, economic resilience, and Hawai‘i's status as a prime tourism destination. The agency also noted the strength of airport management and stable finances. These positive aspects were emphasized despite challenges such as the pandemic, Maui wildfires, and currency exchange rates affecting international traffic demand.

S&P Global Ratings and Fitch Ratings reaffirmed their ratings for the Airports System at AA-. With Moody’s upgrade to Aa3, the Airports System now holds its highest ratings historically, marking a first with all bond ratings in the "double-A" category.

Governor Josh Green commented on this achievement: “The state has been investing in Hawai‘i’s airports to modernize our facilities and improve the passenger experience, and this rating upgrade is a testament to the state’s ability to pursue these investments prudently, in a financially responsible manner.”

Currently underway is a $2.5 billion capital program extending through 2031 aimed at enhancing airport infrastructure. This includes runway repairs, terminal renovations, security enhancements, and new facility construction.

“These investments in our airports represent the next phase in enhancing the passenger experience for both residents and visitors while also increasing safety, capacity and improving operational efficiencies,” stated Ed Sniffen, Director of HDOT.

Recent developments include opening new facilities such as Mauka Concourse at Daniel K. Inouye International Airport (HNL), adding significant terminal space; a Federal Inspection Station Facility at Ellison Onizuka International Airport; consolidated car rental facilities; along with other projects across various terminals.

The credit rating increase comes before a revenue bond issuance scheduled for February 13th. It aims to raise approximately $600 million for capital projects plus $200 million to refinance existing debt for interest savings. Preparations involved meetings between HDOT officials and bond rating agencies which led to Moody’s review and subsequent upgrade.

Ed Sniffen remarked on this progress: “The successful rating review and upgrade by Moody’s reflects the confidence the bond market has in the Airports System and how we manage our program and finances.” He anticipates that this will result in lower borrowing costs during discussions with investors about system strengths following Moody's upgrade.