AAPA Seaports Advisory

Finance: Hawaii

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Fitch Affirms Hawaii DOT's Harbor System Revenue Bonds at 'A+'; Outlook Stable

Fitch Ratings has affirmed the 'A+' rating with stable outlook of the Hawaii Department of Transportation (HDOT)’s $323 million in outstanding harbor system revenue bonds.

HDOT’s Harbors Division oversees a system of 10 harbors on six islands throughout the state, the largest of which is Honolulu on the island of Oahu. Imports account for about 80 percent of the volume of goods consumed in Hawaii, and roughly 98 percent of that is processed through the port system. Similarly, virtually all inter-island freight movement relies on waterborne conveyance and the services and facilities provided by the state’s harbor system.

In FY 2014-15, the state’s ports together handled 20.4 million short tons of bulk and general cargo, 1.4 million container TEUs, and more the 1.0 million passengers and generated operating revenues totaling $122 million. Work is well underway on a $618 capital improvement plan.   

The agency said the 'A+' rating reflects the harbor system's natural monopoly. It further notes that the system has benefited from strong volume growth since 2011 along with approved multiyear rate increases that provide revenue stability. Despite a "sizeable capital plan that calls for additional borrowing," Fitch expects the harbor system to maintain its "historically robust financial profile with relatively strong coverage, moderate leverage, and high liquidity."

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