Hawaii's credit-rating outlook was reduced by Fitch Ratings as a drop in tourists to the state has weakened revenue and depleted large reserves built up in recent years.

Fitch revised Hawaii to negative from stable, raising the possibility that its $4.4 billion of general obligation bonds might be downgraded from AA, the third-highest rating, according to a report yesterday from analysts Kenneth Weinstein and Richard Raphael. The change comes a week before Hawaii plans to raise $620 million to finance capital projects and refinance debt.

Gov. Linda Lingle issued a statement stressing that all of the three major credit-rating agencies, Fitch, Standard & Poor's and Moody's Investors Service, left their actual bond ratings unchanged. S&P and Moody's also left their outlooks unchanged.

Georgina Kawamura, director of finance for the state Department of Budget and Finance, said she's not sure what effect the Fitch outlook downgrade will have until next week when the state bonds become available for purchase in the market. The state will offer its bonds to retail investors, Hawaii brokerages, on Monday and make what doesn't get sold available for institutional investors on Tuesday.

“;We will try to market strongly using the other two agencies' reports as a basis of favorable rates, but we'll have to see (about the Fitch downgrade effect) when we're in the market next week,”; Kawamura said. “;It's not fair to comment why one ratings agency takes a different view than the others because they're all looking at the same information.”;

Visitor arrivals to Hawaii fell 10.8 percent last year from 2007 and the decline accelerated to 14 percent in 2009 through March, Fitch said in its report.

Subsequently, visitor arrivals slipped just 1.3 percent in April to bring the state's year-to-date decline to 11.1 percent compared to the first four months of 2008.

The state plans to raise taxes, cut spending, use federal stimulus money and implement furloughs to make up for falling revenue. Officials project combined general and reserve fund balances will stay below 3 percent through 2013, according to Fitch.

“;Expected thin reserve levels limit the state's financial flexibility, should further revenue weakening persist amid the global recession,”; the Fitch analysts said.

While Hawaii's unemployment almost doubled to 6.9 percent in April from 3.5 percent a year earlier, the rate remains below the U.S average of 8.9 percent.

Standard & Poor's affirmed Hawaii's AA general obligation bond rating on Tuesday.

“;Declines in tourism-related metrics and revenues, construction spending and other related economic activity have led to lower general fund tax revenue growth rates, but management has been willing to implement aggressive solutions to mitigate the effects,”; said Paul Dyson, an analyst at S&P.

Hawaii carries an Aa2 rating from Moody's Investors Service, the company's third-highest grade. Moody's also kept its rating unchanged.

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Star-Bulletin writer Dave Segal contributed to this story.