Maui County's strong economy and rising property tax base have caught the eye of three ratings services, which have upgraded the county's debt ratings. That may help the county save on borrowing costs in an upcoming $35 million bond issue.

Standard & Poor's Ratings Services and Fitch Ratings raised the county's appraisal to "AA" from "AA-" and assigned an AA rating to the $35 million bond issue. Moody's Investors Service also raised its rating, Bloomberg News reported.

"The county has benefited greatly from very strong growth in property values, which drives property taxes, the main general fund revenue source," said Rob Williams, Standard & Poor's analyst, in a press statement.

"In addition, the county has a strong, historically resilient and internationally prominent tourism-based economy, bolstered by strong recent visitor trends and a continued emphasis on the high-end consumer."

Williams noted the county has reported large general fund surpluses over the past four fiscal years and expects to have an additional surplus of $20 million in fiscal 2007.

Fitch Ratings said it has upgraded Maui's $253.2 million of outstanding parity bonds to AA with a stable outlook.

Fitch said the upgrade reflects the strong performance of Maui's economy along with the expansion of the county's property tax base. This has enabled Maui to "improve its financial operations and enhance reserves to high levels," Fitch said.

Better financial ratings translate into lower borrowing costs when debt is issued.

Fitch said Maui's $35 million general obligation bonds, 2008 series A, is expected to be sold via negotiation with UBS Investment Bank about Jan. 8.

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