Fitch: Hawaii DOT’s Harbor System Revs at ‘AA-’, Outlook Stable

Fitch Ratings has affirmed the 'AA-' rating on Hawaii Department of Transportation's (HI) $154.5 million of outstanding harbor system revenue bonds. The Rating Outlook is Stable.

Rating Rationale

The rating reflects the harbor system's natural monopoly position serving the islands of Hawaii. The system benefits from positive revenue trends supported by stable volume growth, along with an enacted tariff rate mechanism. Despite a sizable capital plan that calls for additional borrowing, the harbor system is expected to maintain its historically robust financial profile with strong coverage, relatively low leverage, and high liquidity providing over 1,000 days cash on hand (DCOH). Recent coverage levels have been consistently well above 3.0x, and leverage has been trending downward to below 1.0x. While the port's outstanding debt balance is projected to increase in the near term with the anticipated borrowing of $120 million in fiscal 2020, leverage will remain supportive of the current rating level given the port's high liquidity levels.