Two top bond rating agencies last week upgraded their credit ratings for the state of Hawaii by a notch to the second-highest possible, a change that will allow the state to pay less interest when it borrows money later this month to finance state construction projects and to refinance debt.

Those new ratings combined with the assessment of a “stable” outlook for state finances is the best overall review the agencies have ever given the state, said state Budget Director Wesley Machida.

The higher ratings are “a reflection of the governor’s fiscal initiatives as well as the Legislature,” Machida said. “We’re hoping that this will continue to improve and enhance our long-term financial standing.”

Moody’s Investor Service announced Wednesday it had increased the state rating to Aa1 from the previous rating of Aa2, while Standard &Poor’s boosted the state rating to AA+ from AA.

Moody’s cited “the state’s positive economic and revenue trends, the restoration and maintenance of sizable reserves, and proactive measures” to set aside money to pay for future public worker pension and health care obligations.

Among the factors considered by the rating agencies was the state’s record cash balance of more than $1 billion on June 30, the end of the last fiscal year.

Gov. David Ige said in a written statement that “the strong budgetary and financial policies that I have promoted and established, along with the actions taken by the Legislature, were recognized as very significant by Moody’s and Standard &Poor’s in their review of our credit rating.”

Ige said the state took steps to begin to pay down pension and health fund liabilities while also building up the state’s cash reserves to allow it to better withstand future economic downturns. “Striving to live within our financial resources is something that we all do as individuals and something that we definitely must adhere to as a state,” Ige said in his written statement.

Although Moody’s described the state’s outlook as “stable,” the agency also noted the state has relatively high levels of debt and unfunded pension and health care obligations for public workers as compared with other states.

Debt per capita for Hawaii is $4,557, earning the state a ranking of third highest in the nation, according to Moody’s. Using a different measurement, Hawaii’s debt as a percentage of personal income is the highest in the country at 9.9 percent, compared with the median of 2.5 percent among other states, according to the agency.

Those high debt levels exist largely because state government here is responsible for the construction needs of the state’s public schools, which is not the case in other states, according to Moody’s.

The agency also reported it calculated the 2014 Adjusted Net Pension Liability for Hawaii at 141 percent of state governmental revenues, which was the seventh highest of the 50 states. It was also more than twice the median of 59 percent for other states, according to the agency.

The state plans to sell another $400 million in general obligation bonds on Sept. 28 and 29 to raise money for construction projects, and will also issue new bonds to refinance existing state debt at lower interest rates. Machida said state officials will decide later exactly how much debt to refinance depending on market conditions, but an announcement from the governor’s office said the state plans to issue a total of $750 million in bonds.

When that sale is completed, the state will have $6.4 billion in outstanding general obligation debt.