Industrial revenue bonds in Hawaii
Volume cap, active issuers, the local buyer base and the steps to finance a manufacturing, recycling, water or housing project in Hawaii with tax-exempt bonds.
State facts verified October 2026Key takeaways
- $397.6M of volume cap in 2026 — the $397.6 million small-state minimum, or $278 per resident against the federal $135; rank 36 of 51 by size.
- 4 Hawaii issuer entries appear in SEC-registered fund holdings, $14.5M in total, −$4.4M over the latest quarter (filers report some issuers under more than one name).
- 4 FDIC-insured banks headquartered in the state hold $291.5M of municipal securities — the natural direct purchasers for small issues.
- 1 single-state municipal funds buy Hawaii bonds specifically, which supports in-state demand and pricing.
Issuers whose bonds funds already hold
Registered funds’ holdings show which Hawaii issuers buyers already know. The tables cover all conduit and private activity issuers in fund holdings — including transportation, housing, nonprofit and pollution-control issuers — so they are context for demand, not a list of issuers that do manufacturing bonds.
| Series | Held | Change |
|---|---|---|
| HAWAII ST DEPT BUSINESS ECONOMIC DEV & TOURISM GREEN ENERGY MKT SECURITIZATION | $9.1M | −$2.8M |
| State of Hawaii Department of Business Economic Development & Tourism | $3.0M | −$894K |
| HAWAII ST DEPT BUSINESS ECON D | $2.4M | −$713K |
| Hawaii (State of) Department of Business Economic Development & Tourism (Sustainability Bonds) | $33K | +$33K |
The local buyer base
Banks
4 FDIC-insured banks are headquartered in Hawaii, together holding $291.5M of municipal securities in the latest call reports. Banks often buy small industrial issues outright (direct purchase) or provide letters of credit that let money market funds buy variable-rate bonds.
Funds
National high-yield municipal funds are the core buyers of unrated industrial bonds. 1 single-state funds focus on Hawaii:
- BISHOP STREET FUNDS
How Hawaii allocates volume cap
Allocating agency: Hawaii Department of Budget and Finance (assigns the State's share with the Governor's approval), under HRS chapter 39B. HRS 39B-2 splits the annual state ceiling 50% to the State, 37.55% to the City and County of Honolulu, 5.03% to Hawaii County, 2.41% to Kauai County and 5.01% to Maui County. The Department of Budget and Finance, with the Governor's approval, assigns the State's share to issuers or counties and may recall and reassign county and issuer allocations.
Issuers that do manufacturing bonds
| Issuer | Type |
|---|---|
| State of Hawaii Department of Budget and Finance (special purpose revenue bonds) | state issuer; each issue requires legislative authorization |
Sources: data.capitol.hawaii.gov (1) · data.capitol.hawaii.gov (2) · budget.hawaii.gov · checked October 2026. Procedures and fees change; confirm with the agency and bond counsel.
Not found on an official page yet: a published allocation calendar; state allocation fees; state approvals beyond the TEFRA hearing; incentives that stack with the bonds; an official programme contact; a published figure for cap remaining. We leave these out rather than estimate; ask the allocating agency.
How to finance a project in Hawaii
- Confirm eligibility. Manufacturing projects up to $10 million under the small-issue capital expenditure election, or an exempt facility such as solid waste, water or qualified housing. See the guide.
- Choose an issuer. In Hawaii, issuers with published industrial bond programs include State of Hawaii Department of Budget and Finance (see the issuer table above). A county or city industrial development authority, a port authority or a statewide finance authority can serve; the fund-holdings tables are context, not a directory. How to choose an issuer.
- Obtain a declaration of official intent (inducement resolution). Costs paid up to 60 days before it, and any time after, can be reimbursed from bond proceeds (Treas. Reg. §1.150-2).
- Apply for volume cap to the state’s allocating agency, Hawaii Department of Budget and Finance. Hawaii’s 2026 ceiling is $397.6M; allocation is at the state’s discretion, by round, lottery or first-come, and the ceiling is not the amount still available.
- Hold the TEFRA hearing after at least seven days’ public notice (the issuer’s website may be used) and obtain the elected official’s approval. If the issuer sits outside the project’s jurisdiction, an elected official of the host jurisdiction must also approve; approval lapses if bonds are not issued within a year.
- State approvals, documents and closing. Some states add their own steps — attorney general review, court validation or a state commission’s approval. Bond counsel drafts the documents; a bank buys the bonds directly or a placement agent places them with investors.
The order of these steps varies by state: some require the public hearing and local approval before they allocate volume cap.
Questions borrowers ask
Do industrial revenue bonds in Hawaii need volume cap?
Most do. Federal law (IRC §146) requires small-issue manufacturing bonds and most exempt-facility bonds to receive an allocation of the state’s annual cap, which for Hawaii is $397.6M this year. Governmentally owned airports, docks and solid waste facilities, and qualified 501(c)(3) bonds, do not.
Who issues industrial revenue bonds in Hawaii?
Issuers with published industrial bond programs in Hawaii include State of Hawaii Department of Budget and Finance. County and city development authorities, port authorities and statewide finance authorities issue depending on the state, and national conduits can issue with the host jurisdiction’s approval. The allocating agency (Hawaii Department of Budget and Finance) can confirm who is active.
Who buys Hawaii industrial revenue bonds?
National high-yield municipal funds, banks — including the 4 headquartered in the state — insurers and separately managed accounts, plus 1 funds dedicated to Hawaii bonds.
How long does it take?
Typically three to six months from engagement to closing; volume cap rounds and issuer board calendars can add time.
Check whether your project qualifies Read the complete guide
Methodology
Volume cap is the 2026 federal formula — $135 per resident with a $397,625,000 small-state minimum (Rev. Proc. 2025-32) — applied to Census Vintage 2025 population estimates; where a state publishes its own figure, the state’s figure governs. It is the annual ceiling, not the amount still available. Issuer and bond figures are holdings reported by SEC-registered funds on Form N-PORT, classified by Securitief; bank figures are municipal securities in FDIC call reports for banks headquartered in the state.
Important information. Securitief Research is published by Securitief, operated by Applied America. Securitief is not a placement agent or underwriter and does not seek or receive compensation from any financing, including financings of issuers and borrowers discussed here. It is not acting as a municipal advisor and owes no fiduciary duty to any issuer or obligated person unless separately engaged in writing.
This material is general information. It is not tax, legal, investment or municipal advice, a recommendation, or an offer to sell or a solicitation of an offer to buy any security. Offers are made only by offering documents and only where permitted by state securities laws. State allocation procedures change; confirm current rules with the allocating agency and bond counsel.
Sources: SEC Form N-PORT and FDIC call reports (holdings), IRS and Census (volume cap and population), state agency publications. Issuer classification and aggregation are Securitief’s own and may contain matching errors; figures may be revised. No licensed index levels (MMD, BVAL, ICE) or EMMA trade data are used. Past holdings do not indicate future demand, pricing or the availability of financing. Interest on private activity bonds may be subject to the alternative minimum tax; tax treatment depends on the facts and the opinion of bond counsel.