To finance a consolidated rent-a-car (CONRAC) facility, the Hawaii Department of Transportation (HDOT) secured bond interest rates of 2.987 percent — and ended up selling $194 million worth of taxable Airports System Customer Facility Charge (CFC) Revenue Bonds as a result.
While the effort got the CONRAC fully funded, the run on bonds could have gotten it paid for many times over. HDOT reports that by the end of business Aug. 14 they had more than $1.2 billion in orders for the bonds, which in turn sent interest rates tumbling from initial expectations. The CONRAC will be located at the Daniel K. Inouye International Airport (HNL) in Honolulu.
The bonds in question are Series 2019A CFC Bonds, and they represent record rates compared against Series 2017A CFC Bonds, which held an interest rate of 3.986 percent. At the achieved 2.987 percent interest rate, $37.5 million in debt service savings will be achieved — and nearly $8.5 million of this came from lowering the initial pre-pricing all-in rate from 3.214 percent.
These bonds have also been given high marks from the various credit rating agencies, at ratings of A2 from Moody’s, A+ from S&P and an A from Fitch. All were noted as stable.
As a result of this success, CONRAC construction should be finished in spring 2021, following by an improvement period and an expected opening of fall 2021.