Moody’s Downgrade: Rail Debt Gimmick Comes Back To Bite Honolulu Taxpayers
In 2012, Honolulu officials thought they could protect the county’s credit rating by not counting bond issues for the Honolulu rail in the county’s “debt affordability limit.”
But they were wrong.
In early February, Moody’s Investors Service lowered Honolulu County’s credit score from Aa1 to Aa2, citing the county’s increased debt burden due to general obligation bonds “issued for construction of the rapid transit system.” ….
Exempting rail debt from the debt limit “will undoubtedly affect the city’s bond rating because the bond raters relied on the limits on debt in rating the city,” former Gov. Ben Cayetano warned in 2012.
