Finance: Hawaii
Fitch Affirms Hawaii DOT's $309 Million Harbor System Revenue Bonds at "A+", raises Outlook to "Positive"
Fitch Ratings has affirmed the 'A+' rating on the Hawaii Department of Transportation's (HDOT) $309 million in outstanding harbor system revenue bonds. It also revised the rating outlook to "positive" from "stable."
That system consists of 10 public ports administered by the HDOT’s Harbors Division. Approximately 80 percent of the total volume of goods consumed in Hawaii is imported and roughly 98 percent of that is processed through its public seaport system.
The "Positive Outlook" reflects Fitch’s conclusion that the harbor system will be able to sustain its continued strong financial performance in terms of coverage, liquidity, and leverage based on positive operational activities and enacted tariff adjustments even with additional borrowings anticipated under its multi-year capital program.
Fitch says the 'A+' rating was justified by several factors, including the harbor system's natural monopoly position serving the islands of Hawaii. The system benefits from strong volume growth since 2011 along with approved multi-year tariff rate increases that provide revenue stability. Despite a sizeable capital plan that calls for additional borrowing, the harbor system is expected to maintain its historically robust financial profile with relatively strong coverage, relatively low leverage, and high liquidity providing more than over 1,000 days’ cash on hand.
In a similar action, S&P Global Ratings recently raised it raised its long-term rating and underlying rating of those bonds from 'A+' to 'AA-' with "stable" outlook.