Much of Hawaii's investment portfolio off limits

AP News
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Posted: Dec 30, 2009 2:05 PM

Hawaii is unwilling to access $975 million in its investment portfolio for fear of taking a $200 million loss.

That's what state Finance Director Georgina Kawamura told state lawmakers at a joint House-Senate informational hearing.

Kawamura says the best thing to do is for the state to hold on to the investments until they mature.

Meanwhile, lawmakers were told the state is earning an average of 1.85 percent on the auction-rate securities. They are long-term bonds subject to a complex auction process. The market froze in February 2008.

About 37 percent of the state's $2.6 billion portfolio is tied up in the investments.

Sen. Donna Mercado Kim says no more than 20 percent should be in auction-rate securities.