Investor demand was strong for $42 million of special-purpose revenue bonds Hawaii Pacific University sold this week to help finance its redevelopment of Aloha Tower Marketplace, HPU officials said Friday.
HPU’s plans for Aloha Tower include adding student housing and other university amenities along with new retailers and restaurants to the 165,000-square-foot retail complex fronting Honolulu Harbor. HPU announced last week that among the new retailers will be the Barnes & Noble unit that operates on the college’s campuses.
The renovations at Aloha Tower are scheduled to begin sometime during the 2013-2014 school year, which starts in September, according to a news release from HPU. The university is aiming to have the student housing finished in time for students enrolling in the fall of 2014.
Other planned improvements include converting building space at Pier 10 into a sports and entertainment complex. The facility would feature a basketball arena for the university that also could be used as a venue for concerts, performing arts and other community events.
At Pier 7 the former Hawaii Maritime Center would be converted into an HPU faculty club and alumni center.
The bonds included five different maturities, the longest of which was 30 years. Standard & Poor’s rated the bonds "BB," its highest noninvestment grade rating. The bonds were sold with an average interest rate of 6.66 percent. George K Baum & Co., a Kansas City, Mo.-based investment bank, handled the bond issue for HPU.
"The HPU bonds were quite well received by institutional investors. Some of the best names in the national bond markets made substantial purchases," said Lee White, executive vice president at George K Baum & Co.
HPU is planning a second bond issue next year for around $38 million to raise money for other projects, including improvements at its Kaneohe campus and at the Oceanic Institute at Makapuu.
The strong demand for this week’s bond issue "portends well" for next year’s sale, said Todd Simmons, HPU’s vice president for marketing and communications.
