§ 2406 — Bonds and notes of the agency

New York § 2406

• Jurisdiction: New York
• Law PBA: Public Authorities
• Title 17: State of New York Mortgage Agency Act
• Part 1: No title
• Art. 8: Miscellaneous Authorities

Text

§ 2406. Bonds and notes of the agency. (1) Subject to the approval of\nthe New York public authorities control board in accordance with the\nprovisions of chapter thirty-nine of the laws of nineteen hundred\nseventy-six, as amended and subject to the provisions of section two\nthousand four hundred seven of this title, the agency shall have the\npower and is hereby authorized from time to time to issue its negotiable\nbonds and notes in conformity with applicable provisions of the uniform\ncommercial code in such principal amounts as, in the opinion of the\nagency, shall be necessary to provide sufficient funds for achieving the\ncorporate purposes thereof, including the purchase of mortgages from\nbanks, the payment of interest on bonds and notes of the agency,\nestablishment of reserves to secure such bonds and notes, the transfer\nof money to the state as described in subdivision twenty-seven of\nsection twenty-four hundred four of this chapter, and all other\nexpenditures of the agency incident to and necessary or convenient to\ncarry out its corporate purposes and powers, except the operating\nexpenses of the agency.\n (2) Except as may otherwise be expressly provided by the agency, all\nbonds and notes issued by the agency shall be general obligations of the\nagency, secured by the full faith and credit of the agency and payable\nout of any moneys, assets, or revenues of the agency, subject only to\nany agreement with bondholders or noteholders pledging any particular\nmoneys, assets or revenues.\n (3) Bonds and notes shall be authorized by a resolution or resolutions\nof the agency adopted as provided by this title; provided, however, that\nany such resolution authorizing the issuance of bonds or notes may\ndelegate to an officer of the agency the power to issue such bonds or\nnotes from time to time and to fix the details of any such issues of\nbonds or notes by an appropriate certificate of such authorized officer.\n (4) Such bonds or notes shall bear such date or dates, shall mature at\nsuch time or times, shall bear interest at such rate or rates, shall be\nof such denominations, shall be in such form, carry such registration\nprivileges, be executed in such manner, be payable in lawful money of\nthe United States of America at such place or places within or without\nthe state, be subject to such terms of redemption prior to maturity as\nmay be provided by such resolution or resolutions or such certificate\nwith respect to such bonds or notes, as the case may be; provided,\nhowever, that the maximum maturity of bonds shall not exceed forty years\nfrom the date thereof and the maximum maturity of notes or any renewals\nthereof shall not exceed seven years from the date of the original issue\nof such notes.\n (5) Any bonds or notes of the agency may be sold at such price or\nprices, at public or private sale, in such manner and from time to time\nas may be determined by the agency, and the agency may pay all expenses,\npremiums and commissions which it may deem necessary or advantageous in\nconnection with the issuance and sale thereof. No bonds or notes of the\nagency may be sold at private sale, however, unless such sale and the\nterms thereof have been approved in writing by (a) the comptroller if\nsuch sale is not to the comptroller and the comptroller is not then\nserving as a director of the agency, or (b) the state director of the\nbudget, if such sale is to the comptroller or the comptroller is then\nserving as a director of the agency.\n (6) The agency is authorized to provide for the issuance of its bonds\nor notes (including bonds, notes or other obligations the interest on\nwhich is includable under the United States Internal Revenue Code of\nnineteen hundred eighty-six, as amended, or any subsequent corresponding\ninternal revenue law of the United States, in the gross income of the\nholders of the bonds to the same extent and in the same manner that the\ninterest on bills, bonds, notes or other obligations of the United\nStates is includable in the gross income of the holders thereof under\nsaid Internal Revenue Code or any such subsequent law) for the purpose\nof refunding any bonds or notes of the agency then outstanding,\nincluding the payment of any redemption premiums thereon and any\ninterest accrued or to accrue to the redemption date next succeeding the\ndate of delivery of such refunding bonds or notes. The proceeds of any\nsuch bonds or notes issued for the purpose of so refunding outstanding\nbonds or notes shall be forthwith applied to the purchase or retirement\nof such outstanding bonds or notes or the redemption of such outstanding\nbonds or notes on the redemption date next succeeding the date of\ndelivery of such refunding bonds or notes and may, pending such\napplication, be placed in escrow to be applied to such purchase or\nretirement or redemption on such date. Any such escrowed proceeds,\npending such use, may be invested and reinvested in obligations of or\nguaranteed by the state or the United States of America, or in\ncertificates of deposit or time deposits secured in such manner as the\nagency shall determine, or in obligations of any agency of the state or\nthe United States of America which may from time to time be legally\npurchased by savings banks within the state as an investment of funds\nbelonging to them or in their control, or in obligations of the Federal\nNational Mortgage Association, maturing at such time or times as shall\nbe appropriate to assure the prompt payment, as to principal, interest\nand redemption premium, if any, on the outstanding bonds or notes to be\nso refunded by purchase, retirement or redemption, as the case may be.\nThe interest, income and profits, if any, earned or realized on any such\ninvestment may also be applied to the payment of the outstanding bonds\nor notes to be so refunded by purchase, retirement or redemption, as the\ncase may be. After the terms of the escrow have been fully satisfied and\ncarried out, any balance of such proceeds and interest, if any, earned\nor realized on the investments thereof may be returned to the agency for\nuse by it in any lawful manner. All such bonds or notes shall be issued\nand secured and shall be subject to the provisions of this title in the\nsame manner and to the same extent as any other bonds or notes issued\npursuant to this title.\n (7) Whether or not the bonds and notes are of such form and character\nas to be negotiable instruments under the terms of the uniform\ncommercial code, the bonds and notes are hereby made negotiable\ninstruments within the meaning of and for all the purposes of the\nuniform commercial code, subject only to the provisions of the bonds and\nnotes for registration.\n (8) Subject only to the provisions of sections two thousand four\nhundred seven and two thousand four hundred eight of this title, any\nresolution or resolutions authorizing any bonds or notes of the agency\nmay contain provisions which may be a part of the contract with the\nholders of such bonds or notes, as to: (a) pledging or creating a lien,\nto the extent provided by such resolution or resolutions, on all or any\npart of any monies or property of the agency or of any moneys held in\ntrust or otherwise by others for the payment of such bonds or notes; (b)\notherwise providing for the custody, collection, securing, investment\nand payment of any moneys of the agency; (c) the setting aside of\nreserves or sinking funds and the regulation or disposition thereof; (d)\nlimitations on the purpose to which the proceeds of sale of any issue of\nsuch bonds or notes then or thereafter to be issued may be applied; (e)\nlimitations on the issuance of additional bonds or notes, the terms upon\nwhich additional bonds or notes may be issued and secured, and upon the\nrefunding of outstanding or other bonds or notes; (f) the procedure, if\nany, by which the terms of any contract with the holders of bonds or\nnotes may be amended or abrogated, the amount of bonds or notes the\nholders of which must consent thereto and the manner in which such\nconsent may be given; (g) the creation of special funds into which any\nmoneys of the agency may be deposited; (h) vesting in a trustee or\ntrustees such properties, rights, powers and duties in trust as the\nagency may determine, which may include any or all of the rights, powers\nand duties of the trustee appointed pursuant to section two thousand\nfour hundred nine of this title, and limiting or abrogating the right of\nthe holders of bonds or notes to appoint a trustee under such section or\nlimiting the rights, duties and powers of such trustee; (i) defining the\nacts or omissions to act which shall constitute a default in the\nobligations and duties of the agency and providing for the rights and\nremedies of the holders of bonds or notes in the event of such default,\nproviding, however, that such rights and remedies shall not be\ninconsistent with the general laws of this state and other provisions of\nthis title; and (j) any other matters of like or different character,\nwhich in any way affect the security and protection of the bonds or\nnotes and the rights of the holders thereof.\n (9) Any resolution or resolutions or trust indenture or indentures\nunder which bonds or notes of the agency are authorized to be issued may\ncontain provisions for vesting in a trustee or trustees such properties,\nrights, powers and duties in trust as the agency may determine which may\ninclude any or all of the rights, powers and duties of the trustee\nappointed by the holders of any issue of notes or bonds pursuant to\nsection two thousand four hundred nine of this title, in which event the\nprovisions of said section two thousand four hundred nine authorizing\nthe appointment of a trustee by such holders of bonds or notes shall not\napply.\n (10) It is the intention of the legislature that any pledge of\nmortgages, housing loans, property, earnings, revenues or other moneys\nmade by the agency shall be valid and binding from the time when the\npledge is made; that the mortgages, housing loans, property, earnings,\nrevenues or other moneys so pledged and thereafter received by the\nagency or its agent, including a servicing bank shall immediately be\nsubject to the lien of such pledge without any physical delivery thereof\nor further act, and that the lien of any such pledge shall be valid and\nbinding as against all parties having claims of any kind in tort,\ncontract or otherwise against the agency or its agent, including a\nservicing bank irrespective of whether such parties have notice thereof.\nNeither the resolution nor any other instrument by which a pledge is\ncreated need be recorded.\n (11) Neither the members of the agency nor any person executing the\nbonds or other obligations shall be liable personally on the bonds or\nother obligations or be subject to any personal liability or\naccountability by reason of the issuance thereof.\n