A record low interest rate achieved by the City and County of Honolulu on $169 million of wastewater revenue bonds sold this week will save ratepayers millions of dollars in financing costs, officials said.

The bonds, sold Wednesday and due to mature in 2042, will carry an interest rate of 4.29 percent. The lowest previous interest rate secured by the city and county was 4.55 percent in 2005.

“The attractive interest rate is attributed to the wastewater system’s strong financial position and affirmed credit ratings, saving ratepayers millions of dollars over the life of the bonds,” according to a news release from the city and county

Proceeds from the bond sale will help pay for a variety of important repairs and upgrades to wastewater pump stations, pipes and facilities in Ala Moana, Chinatown, Kailua, Kalihi, Kaneohe, Manoa, Nuuanu, Palolo, Sand Island, Honouliuli, Wahiawa, Waimalu and other neighborhoods.

The bonds were rated AA by Fitch Ratings and Aa2 by Moody’s Investor Service. Both ratings are in the agencies’ second-highest tier of credit quality

Moody’s said the local government “has worked diligently to comply with evolving state and local federal regulations” including a 2010 consent decree with the Environmental Protection Agency in which the city and county pledged to spend billions of dollars to upgrade its sewer system.

Moody’s also noted that the rating and outlook was based on the “expectation that the wastewater system will continue to benefit from approved rate increases and maintain favorable financial performance consistent with the City’s conservative financial and debt policies.”

In addition to strong demand from institutional investors the bond issue generated more than $37.8 million of orders from retail customers, both in Hawaii and on the mainland.