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News Release

The Town of Hilton Head Island Saves More Than $889,000 in Bond Refinancing

Release Date: November 6, 2019

Contact Information:
Carolyn Grant email icon , Communications Director, 843-341-4618

Hilton Head Island, SC - The Town of Hilton Head Island recently issued $16.5 million in Special Revenue Obligation Hospitality Fee Refunding Bonds Series 2019, and achieved significant savings through lower interest rates. The new bonds replaced the Series 2011A and 2011B bonds totaling $16.7 million.

The average coupon interest rate for the old bonds was 4.096%, while the average coupon interest rate for the new bonds is 2.782%. The final maturity for both the new and the refunded bonds is 2036.

As a result of the lower interest rate, the Town will realize $889,269 in savings over the life of the bonds. The present value of the savings is $433,665.  Recently, the Town underwent a rigorous bond ratings process with the three major rating agencies. Two of the three agencies – Moody’s and Standard & Poor’s - affirmed the Town's ratings citing strong financial practices, ample reserves, preserved debt capacity and a strong economy.  The third agency, Fitch Ratings, raised its rating from AA to AA+. 

The Special Obligation Hospitality Fee Revenue bonds are rated:

  • Moody's: Aa2
  • Fitch: AA+
  • Standard & Poor's: AA

The ratings on the General Obligation bonds were affirmed at:

  • Moody's: Aaa
  • Fitch: AA+
  • Standard & Poor's: AA+

“The favorable ratings' reports were integral in driving demand for the bonds. The Town was able to take advantage of current market conditions to lock-in very favorable rates and achieve more than $889,000 in savings," said Town Manager Stephen G. Riley. Money saved from refunding the two bond issues will be used for future purchases of emergency equipment for the Town’s Fire Rescue Division in accordance with the Town’s capital improvements plan.

For information about the Town's bond profile, ratings and debt management policies, visit www.hiltonheadislandsc.gov.