The state was successful in selling all of a $125.2 million bond offering after having to reduce the size of sale earlier this month because of the continued fallout of the Wall Street crisis.

State officials said the offering of highways revenue bonds was fully subscribed, given its moderate size and an increased appetite for bonds by individual investors, including many from Hawai'i who were were attracted by a stable investment with interest income that's exempt from state and federal taxes.

"It was absorbed pretty easily," said Scott Kami, administrator of the financial services division of the state Department of Budget and Finance.

"When you get into the larger transactions, that's where there isn't as much demand as there was prior to September."

The state had to postpone a $600 million bond offering that had been scheduled for September when Lehman Brothers Holdings filed the biggest bankruptcy in U.S. history. Investors pulled back as financial markets tumbled and it wasn't until Dec. 3 that the state was able to sell the general obligation. bonds. The sale went off after the state reduced the sale size by about two-thirds.

The sales are part of Lingle administration plans to boost spending on school repairs, new construction projects and other public works improvements to help pull Hawai'i's economy out of a downturn. On Monday, Gov. Linda Lingle and county mayors announced they wanted to push out construction projects to jump-start the state's construction industry and get more money flowing through the economy.

"Completion of the $125.2 million highways revenue bond sale today, along with the sale of $227.8 million in general obligation bonds earlier this month, will provide a portion of the initial funding for our $1.8 billion public infrastructure improvement plan," said Lingle in a press statement.

"These resources will aid in boosting our construction industry, and support our five-point economic action plan to stimulate and strengthen Hawai'i's economy and create jobs."

The revenue bonds will be used to fund various highway capital improvement projects throughout the state and are repaid through money raised by fuel taxes and vehicle fees. Just as in the Dec. 3 sale, Hawai'i residents played a big role in purchases.

The state said about $49 million of the offering was subscribed for by individual investors, many of those who are Hawai'i residents.

The bonds were sold at an average interest rate of 5.45 percent, which is probably higher than what the state would have paid before September. But Kami said he felt the rate was a good one given current market conditions. He said the state's credit rating is one reason for that. The highway revenue bonds carried an "AA-" rating from Fitch Ratings.

The range of interest rates on the Highway Revenue Bonds being paid by the state start at 4 percent for notes maturing in 2010 to 6 percent for notes maturing in 2029.

The bonds are sold through brokers and dealers. Kami said the state is working on other sales as it looks to fund more public works projects.

"When the market gets to a level where we feel comfortable where we can sell at attractive interest rates we'll probably go back in again," he said.

"Whenever we do any Hawai'i sales, we'll invite any of the local dealers or brokers to participate."