The Abercrombie administration has completed a record bond sale of nearly $1.3 billion and restructured the state’s debt as part of a long-term strategy to repair the financial damage left by the recession.

The state sold $800 million in new bonds at market in November and refinanced $488 million of existing debt at a lower interest rate, which will save the state an estimated $59 million over the next six years.

Kalbert Young, the state budget director, said yesterday investors paid premium prices for the bonds that would generate cash that could be used to help replenish the state’s Hurricane Relief Fund and rainy day fund.

Gov. Neil Abercrombie had tapped the reserve funds to help close a $214 million deficit for the fiscal year that ended in June, leaving the state’s cash reserves dangerously low. The governor and state lawmakers agreed on a two-year budget and financial plan with spending controls and revenue increases to close a projected $1.2 billion deficit over the next two fiscal years.

Credit rating agencies reaffirmed the state’s credit ratings of Aa2/AA/AA — a relief for budget analysts because of the financial challenges — and concluded that the state’s financial management is sound.

An ebullient Abercrombie said yesterday the recognition is an objective assessment of his administration’s fiscal stewardship during his first year in office, which he has likened to the first quarter of a football game. He said he inherited a "fiscal nightmare" from former Gov. Linda Lingle.

"This is the measure. This is the referee coming in to say — making the call at the end of our first quarter," Abercrombie said during a news conference downtown at the Chamber of Commerce of Hawaii.

The state had not sold bonds since January 2010. Young had wanted to go to market earlier this year but worried about investor reaction to a lengthy delay in the state’s Comprehensive Annual Financial Report for fiscal year 2010.

By the time the financial report was completed in October, and Hawaii was ready to pitch bonds to investors, alarm over the European debt crisis helped make the state’s bonds attractive.

Young said the state was able to secure record-low interest rates — 3.34 percent for the entire transaction — and also received more favorable bond pricing than some municipal institutions with superior credit ratings.

The $800 million in new bonds will help pay for state capital improvement projects already in the construction pipeline. The $488 million in refinancing restructures the state’s outstanding bond debt — about $4 billion — retiring debt earlier than expected and reducing debt service.

Young likened the strategy to a homeowner paying off a credit card and using the savings toward reducing a home mortgage.

Abercrombie and Young said they would ask state House and Senate leaders to use the cash from the bond sale to help replenish the Hurricane Relief Fund to about $143 million and the rainy day fund to about $70 million over two fiscal years. The state law allowing the governor to tap the reserve funds gave the administration the authority to sell bonds if necessary to replenish the funds by 2014 — a safeguard that the money would eventually be restored — but budget analysts and many lawmakers want to do it sooner without expanding bond debt.

"We’re going to pay back every single penny," Abercrombie said.

State Rep. Marcus Oshiro (D, Wahiawa), chairman of the House Finance Committee, said lawmakers would consider the administration’s request. "To restore those two pots of money will underscore the state’s solvency, and I think it would be a positive sign to the bond-rating agencies," he said.

The credit-rating agencies — Moody’s Investors Service, Standard & Poor’s and Fitch Ratings — gave Hawaii a stable financial outlook and praised the state’s financial management. But the agencies cited risks, such as high debt levels from unfunded public worker retirements and health care liabilities, depleted cash reserves and late-audited financial reports.

Abercrombie, in reflecting on his first year in office in interviews this week, characterized the state’s finances under Lingle and the budget deficit he encountered last fiscal year in far bleaker terms than he has previously.

Barry Fukunaga, Lingle’s former chief of staff, said in a statement that Lingle guided the state through the recession.

"It is unfortunate that Gov. Abercrombie finds it more expedient to cast blame for his failures, missteps and inability to effectively manage the state’s fiscal situation in his first year in office than accept responsibility or accountability for his own failings," Fukunaga said. "Despite his attempt to blame the prior administration, the public is well aware of his dismal effort as evident by the recent 30 percent approval rating that marks his performance as the worst of any governor in the nation."

Oshiro and others said the state’s financial challenges unfolded over several years, and it has taken — and will take — several years for the state to get back on track.

"You’ve got to give credit where credit is due. And I think the Legislature — House and Senate — did much of the heavy lifting during the term of the prior governor to raise some revenues, cut some programs and transfer some funds that really got us through the toughest, hardest days of the recession," he said.

Dr. Ginny Pressler, chairwoman of the board of directors for the Chamber of Commerce of Hawaii, called the successful bond sale a boost in confidence.

"This is a major gift to the business community because this is the first time we’re seeing a governor and administration and Legislature willing to invest in future financial stability instead of just kicking the can down the road," she said. "We’ve seen too much of that."