§ 22-21-355 — Further Provisions Respecting Investment of Funds

In addition to the investment powers granted by the enabling statute, any authority shall, to the extent permitted by the contracts of such authority with the holders of its securities, have the further power to invest any portion of the principal proceeds derived from the sale of any of its securities not then needed for any of the purposes for which such securities were authorized to be issued, any moneys held in any special fund created pursuant to any resolution or mortgage, mortgage indenture, mortgage and trust indenture or trust indenture authorizing or securing any of its securities, and any other moneys of such authority not then needed by it, in any of the following:
(1) Debt securities (whether general obligations or limited or special obligations) of any state, territory or possession of the United States of America and of any political subdivision of any such state, territory or possession, but if and only if at the time of their acquisition for the account of the authority, such securities are rated by a nationally recognized credit rating agency in one of its four highest rating categories;
(2) Commercial paper of a corporation incorporated under the laws of any state of the United States of America, but if and only if at the time of the acquisition thereof for the account of the authority, such commercial paper is rated “prime one” (or the equivalent thereof) by a nationally recognized credit rating agency;
(3) Banker’s acceptances endorsed or guaranteed by a bank whose senior long-term debt obligations are, at the time of the acquisition of such acceptances for the account of the authority, rated by a nationally recognized credit rating agency in one of its three highest rating categories (or by a bank that is owned or controlled by a bank holding company whose senior long-term debt obligations are, at the time of the acquisition of such acceptances for the account of the authority, rated by a nationally recognized credit rating agency in one of its three highest rating categories);
(4) Bonds and debentures of a corporation incorporated under the laws of any state of the United States of America, but if and only if at the time of the acquisition thereof for the account of the authority, such bonds or debentures have an investment grade rating (or its equivalent) from a nationally recognized credit rating agency; and
(5) To the extent not prohibited by the Constitution of Alabama:
a. Investments in a money market fund or other similar fund, all or substantially all the assets of which consist of federal securities or other assets in which an authority is permitted, by the enabing statute or by the preceding provisions of this section, to invest moneys directly,
b. Participation certificates in federal securities, and
c. Investment or cash management agreements with a bank whose senior long-term debt obligations are, at the time of the acquisition of any such investment or cash management agreement for the account of the authority, rated by nationally recognized credit rating agency in one of its three highest rating categories (or with a bank that is owned or controlled by a bank holding company whose senior long-term debt obligations are, at the time of the acquisition of any such investment or cash management agreement for the account of the authority, rated by a nationally recognized credit rating agency in one of its three highest rating categories).

Legislative History

(Acts 1987, No. 87-745, p. 1458, §6.)