Honolulu sold $271 million in general obligation bonds this week to subsidize its 2024 capital improvement program as well as the ongoing construction of the Honolulu Authority for Rapid Transportation’s rail project, the city announced Thursday.

The city said it successfully sold the bonds on Tuesday with an average interest of 3.71%. The bonds were rated “AA+” by Fitch and “AA+” by Standard &Poor’s — both with “stable” outlooks.

The city said it received more than $477 million in total retail and institutional orders, including orders from individual Hawaii residents. The demand for these bonds followed the city’s “comprehensive investor outreach effort” via print and digital retail advertising campaign in Hawaii, the city added.

BofA Securities served as the lead underwriter for the bond offering. Morgan Stanley and Piper Sandler served as co-managers, the city said.

“The GO bond proceeds will fund the administration’s and Council’s joint capital improvement priorities and replacement of equipment to better serve our communities,” Mayor Rick Blangiardi said in a written statement.

The mayor added the latest bond sale will go toward refinancing the city’s Series 2019E GO bonds “that will generate nearly $11 million in present value savings for the Skyline rail project.”

According to the city, the remaining 2019 bond debt to be refinanced is approximately $180 million, including interest due. The debt principal provides bridge financing for rail construction until repaid by the state’s general excise tax and transient accommodations tax.

Previously, Andrew Kawano, the city Department of Budget and Finance director, told the Honolulu Star-Advertiser that the proceeds from these GO bond sales — initially pegged at $257.1 million — would be used to fund the city’s $1.34 billion-plus CIP and equipment budgets as funding is needed.

“There is no direct ‘tie-in’ to projects at the time of the bond sales,” he said.

As far as the nearly $10 billion rail project’s ongoing construction, Kawano said GO bonds are not “specifically designated to a particular part of the rail line” either — such as the 5.2-mile segment from Aloha Stadium to Middle Street planned for completion by mid-2025 — but would instead act as “bridge financing for the rail construction” overall.