State of Hawaii
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PRELIMINARY OFFICIAL STATEMENT DATED AUGUST 1, 2018 NEW ISSUE – BOOK-ENTRY ONLY RATINGS: see RATINGS herein The delivery of the Series 2018 Bonds is subject to the opinion of Katten Muchin Rosenman LLP, Bond Counsel, to the effect that under existing law, interest on the Series 2018 Bonds is not includible in the gross income of the owners thereof for federal income tax purposes and that, assuming continuing compliance with the applicable requirements of the Internal Revenue Code of 1986, interest on the Series 2018 Bonds will continue to be excluded from the gross income of the owners thereof for federal income tax purposes. In addition, (i) interest on the Series 2018A Bonds is an item of tax preference for purposes of computing the individual alternative minimum tax; (ii) interest on the Series 2018B Bonds is not an item of tax preference for purposes of computing the individual alternative minimum tax; and (iii) interest on the Series 2018A Bonds is not excludable from the gross income of owners who are “substantial users” of the facilities financed or refinanced thereby. In the further opinion of Bond Counsel, under the existing statutes, interest on the Series 2018 Bonds is exempt from all taxation by the State and any county or any political subdivision thereof, except inheritance, transfer and estate taxes and except to the extent the franchise tax imposed by the laws of the State on banks and other financial institutions may be measured with respect to the Series 2018 Bonds or income therefrom. See “TAX MATTERS” herein. $413,620,000* STATE OF HAWAII Airports System Revenue Bonds $387,395,000* $26,225,000* Series 2018A Series 2018B (AMT) (Non-AMT) Dated: Date of Delivery Due: July 1 as shown on inside cover The $387,395,000* aggregate principal amount of State of Hawaii Airports System Revenue Bonds, Series 2018A (AMT) (the “Series 2018A Bonds”) and $26,225,000* aggregate principal amount of State of Hawaii Airports System Revenue Bonds, Series 2018B (Non-AMT) (the “Series 2018B Bonds” and, together with the Series 2018A Bonds, the “Series 2018 Bonds”) are being issued for the purpose of funding the costs of capital improvement projects at certain facilities of the Airports System (defined herein). The Series 2018 Bonds are special limited obligations of the State of Hawaii (the State“ ”), payable solely from and secured solely by the Revenues (as defined herein) derived by the State from the ownership and operation of the Airports System and the receipts from aviation fuel taxes imposed by the State. See the inside cover for maturities, principal amounts, interest rates, and yields of the Series 2018 Bonds. The Series 2018 Bonds shall be dated as of their date of delivery and shall bear interest from the date of delivery payable each July 1 and January 1, commencing January 1, 2019. The Series 2018 Bonds are subject to optional and mandatory redemption prior to maturity thereof upon the terms and conditions and at the price as described herein. The Series 2018 Bonds are issuable in fully registered form and when issued will be registered initially in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, New York. Purchases of the Series 2018 Bonds will be made in book-entry form only, through brokers and dealers who are, or who act through, DTC participants. Purchases of the Series 2018 Bonds will initially be made in denominations of $5,000 or integral multiples thereof. Beneficial owners of the Series 2018 Bonds will not receive physical delivery of Series 2018 Bond certificates so long as DTC or a successor securities depository acts as the securities depository with respect to the Series 2018 Bonds. So long as DTC or its nominee is the registered owner of the Series 2018 Bonds, payment of the principal of, and premium, if any, and interest on, the Series 2018 Bonds will be made directly to DTC or its nominee. Disbursement of such payments to DTC participants is the responsibility of DTC and disbursement of such payments to the beneficial owners is the responsibility of DTC participants (See “DESCRIPTION OF THE SERIES 2018 BONDS – Book-Entry Only System” herein). The Series 2018 Bonds do not constitute a general or moral obligation of the State nor a charge upon the general fund of the State. The full faith and credit of neither the State nor any political subdivision thereof is pledged to the payment of or as security for the Series 2018 Bonds. Neither the real property nor the improvements comprising the Airports System have been pledged or mortgaged to secure payment of the Series 2018 Bonds. The Series 2018 Bonds are offered when, as and if issued, subject to the approval of legality by Katten Muchin Rosenman LLP, New York, New York, Bond Counsel. Certain legal matters will be passed upon for the Underwriters by their Counsel, Dentons US LLP, Honolulu, Hawaii. It is expected that the Series 2018 Bonds in definitive form will be available for delivery on or about _______________, 2018. Morgan Stanley BofA Merrill Lynch Goldman Sachs & Co. LLC Wells Fargo Securities Dated: _______________, 2018 This Preliminary Official Statement and the information contained herein are subject to completion and amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to offer an of solicitation or the sell to Preliminary this shall circumstances no Under offer an constitute Statement Official This Preliminary amendment. and completion to are subject herein contained the information and Statement Official this As of this date, such jurisdiction. prior of any or qualification under the securities to registration be unlawful laws solicitation or sale would jurisdiction sale of the Series in any in which such offer, nor shall there be any 2018 Bonds, buy, for the omission of certain for purposes except permitted information by SEC Rule 15c2–12(b)(1). by the State of SEC Rule 15c2–12(b)(1) Preliminary “final” Official Statement has been deemed * Preliminary, subject to change. $387,395,000* STATE OF HAWAII AIRPORTS SYSTEM REVENUE BONDS, SERIES 2018A (AMT) Year Principal Interest CUSIP (July 1) Amount* Rate Yield (438670)† 2028 $ 9,775,000 2029 10,580,000 2030 11,100,000 2031 11,650,000 2032 12,235,000 2033 12,840,000 2034 13,490,000 2035 12,205,000 2036 12,825,000 2037 13,455,000 2038 14,130,000 $94,360,000* ____% Term Bonds due July 1, 2043*, Priced: ____ to yield ____%, CUSIP† ____________ $158,750,000* ____% Term Bonds due July 1, 2048*, Priced: ____ to yield ____%, CUSIP† ____________ $26,225,000* STATE OF HAWAII AIRPORTS SYSTEM REVENUE BONDS, SERIES 2018B (Non-AMT) Year Principal Interest CUSIP (July 1) Amount* Rate Yield (438670)† 2025 $8,320,000 2026 8,735,000 2027 9,170,000 * Preliminary, subject to change. † CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (“CGS”) is managed on behalf of the American Bankers Association by S&P Global Market Intelligence. Copyright© 2018 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. The CUSIP® numbers listed above are being provided solely for the convenience of bondowners only at the time of issuance of the bonds, and no representation is made with respect to the correctness thereof. The CUSIP® number for a specific maturity is subject to being changed after the issuance of the bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity. Neither the State nor the Underwriters assume responsibility for the accuracy of such data. REGARDING USE OF THIS OFFICIAL STATEMENT No dealer, broker, salesperson or other person has been authorized by the State or the Underwriters to give any information or to make any representation with respect to the Series 2018 Bonds, other than those contained in this Official Statement, and, if given or made, such other information or representation must not be relied upon as having been authorized by any of the foregoing. This Official Statement is neither an offer to sell nor the solicitation of an offer to buy, nor shall there be any sale of the Series 2018 Bonds offered hereby, by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information and expressions of opinion set forth herein have been furnished by the State and include information obtained by the State from DTC, the Consulting Engineer and other sources that are deemed to be reliable. Such information and expressions of opinion are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create any implication that there has been no change since the date hereof. Neither this Official Statement nor any statement that may have been made verbally or in writing is to be construed as a contract with the registered or beneficial owners of the Series 2018 Bonds. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy, fairness or completeness of such information. This Official Statement should be considered in its entirety.