HONOLULU — The Honolulu Department of Environmental Services sold $241 million in Wastewater System Revenue “green bonds.”

What You Need To Know

  • The average interest rate on the bonds was 4.20% for 30-year debt

  • Fitch Ratings assigned the Wastewater System Revenue Bond an “AA” rating with a “Stable” outlook; Moody’s Investor Services also rated the bonds as “Aa1” with a “Stable” outlook

  • ENV received more than $220 million in orders during a one-day retail-only order period on May 10, including $8 million from individual retail investors

  • As of last April, the department had 100 wastewater projects in various stages of planning, design and construction, totaling $1.64 billion

The department designated the Series 2022 bonds as “green bonds” based on the intended use of their proceeds to finance additions and improvements to the city and county’s wastewater system, according to ENV director Roger Babcock.

“ENV’s Green Bonds designation reflects the use of the proceeds of the Series 2022 Bonds in a manner consistent with the Green Bond Principles, as promulgated by the International Capital Market Association,” Babcock said in a statement released on Wednesday.  

The average interest rate on the bonds was 4.20% for 30-year debt.

Fitch Ratings assigned the Wastewater System Revenue Bond an “AA” rating with a “Stable” outlook. Moody’s Investor Services also rated the bonds as “Aa1” with a “Stable” outlook. 

Moody’s report cited the department’s “sizable operations which demonstrate a trend of healthy debt service coverage, an outsized ample liquidity position … strong management practices including comprehensive fiscal policies, regular rate adjustments and long-term planning, and continuing progress on the system’s large capital improvement plan to address a sizable consent decree.”

ENV received more than $220 million in orders during a one-day retail-only order period on May 10, including $8 million from individual retail investors. The offering was well received by institutional investors who submitted an additional $130 million of orders for the bonds, according to the department.

The department credited strong demand for the ENV’s comprehensive investor outreach effort, which included a retail advertising campaign in Hawaii and a live Zoom investor presentation for institutional investors. 

Bank of America Securities served as the lead underwriter for the offering, with Raymond James and Stifel as the co-managers.
As of last month, the department had 100 wastewater projects in various stages of planning, design and construction, totaling $1.64 billion.

Michael Tsai covers local and state politics for Spectrum News Hawaii.