Maui County offered to sell its General Obligation (GO) Bonds via competitive sale for the first time in more than a decade, triggering a bidding war among Wall Street firms earlier this month, said a recent statement released by Maui County Communications Director Rod Antone.
In the end, Citi Group Global Markets won the bid for $70.2 million in GO Bonds at 2.18 percent interest. This is the lowest interest rate ever offered to Maui County and even lower than those offered to the City and County of Honolulu and the State of Hawai'i during their recent bond sales.
"These firms looked at Maui County's financial stability and economic strength and they liked what they saw," said Mayor Alan Arakawa. "They know that investing in Maui is a good investment and this competitive bid for our bonds proves that."
There were a total of 13 firms that bid on the county's bonds, including Wells Fargo Bank, Bank of America, Goldman, Sachs & Co., JP Morgan Securities and Morgan Stanley & Co.
The bonds will be used to fund approximately $46 million in new county projects while $30 million will be used to help pay off the county's debt--prior bonds and state loans.
Last month, Moody's, Standard & Poors and Fitch rated Maui County's bonds just below a Triple A rating--Aa1/AA+/AA+--the highest ratings in the state. Underwriters noted a strong tourism industry, booming construction projects, "strong financial operations" and "prudent fiscal management" as factors in their high ratings of Maui County.
They also mentioned that the cooperation between the administration and the County Council showed a stable government and a willingness between both the executive and legislative branches to work together.
Even the fact that Larry Ellison, the fifth richest man in the world, had recently purchased a majority of the island of Lana'i played a factor in the bond ratings, according to county officials.
The original press release from Fitch Ratings about Maui County's bond ratings can be found at www.fitchratings.com/creditdesk/press_releases/detail.cfm?pr_id=765378.