COM 0756.001 1996-1998 - Laserfiche WebLink

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April 1, 1998 TO: Councilmembers FROM: Councilmember John Ray RECUVM!s~ 1 RE: News Article F. Y.1. BY, Pacific Business News County Counc4 March 23, 1998 - - - State cashing m on low interest rates BY SANDI M. SKOUSM primary and secondary schools and savings to the state. A refunding PBN Staff Reporter libraries. means the state will replace an old The issue will be made toward debt with a new one, usually The state is preparing to issue the end of this month because interest rates have fallen. about $600 million in general The state plans to issue about Because of the refunding, the ' obligation bonds to obtain new $300 million in bonds to obtain state will see cash flow savings, as money and refinance old debt new money, plus another $300 mil- well as savings of a "few millions Part of the new money will be lion to refund prior issues. of dollars" over the life of the bond 4 used to fund Gov. Cayetano's two- Stanley Shimii, an acting said budget director Earl Anzai. year $1 billion constmction pro- administrator at the state Depart- Ibby Martyn, vice president of , gram designed to help the local ment of Budget & Finance, said the investment banking at A-G. Edward economy rebound. Projects autho- demand for the issue should be & Sons Inc., said an index of gerer- rized by the state Legislature high since the mood of the U.S. al obligation bonds nationwide include improvements at the economy is positive and the shows interest rates are at about University of Hawaii at Manoa, refunding component will bring Please seal BONDS, Page 48 Bonds Continued from Page 1 for new money of $500 this month with S&P ana- refund some of the depart- million. lysts in San Francisco. He ment's old issues. 5 percent. That's the lowest The state has already declined to comment on The issues could be rates have been since the sold about $200 million S&P's upcoming rating. made by the end of June. 1970s and is a significant worth of general obligation Meanwhile, Maui pending reviews by the drop from the 14 percent bonds. The demand was so County is getting set to Maui County Council. ' high of 1982, he said. good that part of the issue, issue roughly up to $80 The largest construction In addition to the cheaper made in October, was million in bonds. The issue project to be funded with cost of funds, Martyn said repriced at lower interest will comprise: the new money is an $8.4 issuing the bonds is smart rates. • between $18 million million community swim- since the slow down in the The bonds carried an A+ and $20 million to obtain ming pool and recreation local construction industry rating from Standard & new money; center: is spurring aggressive bid- Poor's Corp. The state, • up to $35 million to re- The refinancing is ex- ding among contractors. however, purchased insur- finance a prior issue; petted to save the county Solomon Smith Barney ante to raise the bonds to a • an issue of $3.6 million between $800,000 and $1 of New York is the primary Triple A rating. Prior to for an affordable housing million in interest pay- co-senior manager of the that issue, S&P had rated project (a nonprofit organi- ments, said county budget issue. Merrill Lynch and Hawaii state bonds at zation will repay the director Travis Thompson. Prudential Securities Inc. Double A. money); and Paine Webber is the un- are also co-senior man- Moody's Investors • $12 million in new derwriter for the issues. agers. Service did not downgrade money for the county The county last issued The state's fiscal 1998 the bonds; it gave them an Department of Water bonds in June, when it budget includes a total gen- Aa3 rating. Supply, plus between $5 floated $18 million in gen- eral obligation bond issue Anzai said he met earlier million and $10 million to eral obligation bonds. IRet. Ib7Pre11 cry htct. l9ate-, WIR