The Maui News

Maui County sold $106.3 million in general obligation bonds at a premium generating $113.9 million in total proceeds on Tuesday, Department of Finance Director Mark Walker said.

Bank of America Merrill Lynch, which bid a 3.13 percent true interest cost for the 20-year bonds, was the winning bidder. The competitive offering attracted bids from nine underwriters.

Of the $113.9 million in bond proceeds, $12.1 million will be used to prepay and refund existing higher interest rate loans and bonds, while $100.9 million will be allocated to fund new and ongoing capital improvement projects, including construction of the new Maui Service Center, Walker said.

“The prepayment and refunding of the higher interest rate loans and bonds will certainly save Maui County taxpayers money,” Walker said. “More importantly, it will allow the county to continue moving forward with its many capital improvement projects.”

This is the fourth time since 2010 that the County of Maui has offered its bonds for sale using the competitive bid method, a county news release said. Historically, most bond offerings in the state have been through the negotiated sale method, essentially hiring a firm to underwrite the bonds and to find investors.

“Given our current strong financial condition, strong investor interest and the current market, we feel that the competitive bid method is the best for the county,” Mayor Alan Arakawa said. “It is certainly the most transparent.”

The county was recently rated by Moody’s as Aa1 and by Fitch Rating and Standard & Poors as AA+ for this bond sale, which presently gives Maui County the highest bond rating in the state, the news release said. Those ratings are one step below the rating services’ top marks.