§ 3236 — Bonds and notes of the corporation

New York § 3236

• Jurisdiction: New York
• Law PBA: Public Authorities
• Title 4: New York Local Government Assistance Corporation
• Art. 10-B: Title

Text

§ 3236. Bonds and notes of the corporation. 1. (a) The corporation\nshall have power and is hereby authorized from time to time to issue its\nbonds and notes in such principal amount or amounts, subject to\nsubdivision eight of this section, as the corporation shall determine to\nbe necessary, to provide sufficient funds for achieving its corporate\npurposes, including the making of payments pursuant to section three\nthousand two hundred thirty-eight of this title, the payment of interest\non bonds and notes of the corporation, the establishment of reserves to\nsecure such bonds and notes, the payment of amounts required under bond\nor note facilities or agreements relating thereto, and the payment of\nall costs of issuance of its bonds and notes.\n (b) The corporation shall have the power and is hereby authorized from\ntime to time to issue (i) notes to renew notes and (ii) bonds to pay\nnotes, including the interest thereon and, whenever it deems refunding\nexpedient, to refund any bonds by the issuance of new bonds, whether the\nbonds to be refunded have or have not matured, and to issue bonds partly\nto refund bonds then outstanding and partly for any of its other\ncorporate purposes. The refunding bonds may be exchanged for the bonds\nto be refunded or sold and the proceeds applied to the purchase,\nredemption or payment of such bonds.\n (c) Except as may otherwise be expressly provided by the corporation,\nevery issue of its bonds and notes shall be general obligations of the\ncorporation payable out of any revenues of the corporation, subject only\nto any agreements with the holders of particular bonds or notes pledging\nany particular revenues.\n (d) (i) Bonds and notes shall be authorized by resolution of the\ncorporation, be in such denominations and bear such date or dates and\nmature at such time or times, as such resolution may provide, provided\nthat bonds and notes and renewals or refundings thereof shall mature on\na date not later than December thirty-first, two thousand twenty-five\nnor more than thirty years from the date of original issuance.\n (ii) Bonds and notes shall be subject to such terms of redemption,\nbear interest at such rate or rates, be payable at such times, be in\nsuch form, either coupon, registered or book entry form, carry such\nregistration privileges, be executed in such manner, be payable in such\nmedium of payment at such place or places, and be subject to such terms\nand conditions as such resolution may provide.\n (e) Such bonds shall be sold to the bidder offering the lowest\ninterest cost to the corporation, taking into consideration any premium\nor discount and, in the case of refunding bonds, the bona fide initial\npublic offering price, not less than four nor more than fifteen days,\nSundays excepted, after a notice of such sale has been published at\nleast once in a definitive trade publication of the municipal bond\nindustry published on each business day in the state of New York which\nis generally available to participants in the municipal bond industry,\nwhich notice shall state the terms of the sale. The corporation may not\nchange the terms of the sale unless notice of such change is sent via a\ndefinitive trade wire service of the municipal bond industry which, in\ngeneral, makes available information regarding activity and sales of\nmunicipal bonds and is generally available to participants in the\nmunicipal bond industry, at least one hour prior to the time of the sale\nas set forth in the original notice of sale. In so changing the terms or\nconditions of a sale the corporation may send notice by such wire\nservice that the sale will be delayed by up to thirty days, provided\nthat wire notice of the new sale date will be given at least one\nbusiness day prior to the new time when bids will be accepted. In such\nevent, no new notice of sale shall be required to be published.\nAdvertisements shall contain a provision to the effect that the\ncorporation, in its discretion, may reject any or all bids made in\npursuance of such advertisements, and in the event of such rejection,\nthe corporation is authorized to negotiate a private sale or readvertise\nfor bids in the form and manner above described as many times as, in its\njudgment, may be necessary to effect a satisfactory sale.\nNotwithstanding the foregoing provisions of this paragraph, whenever in\nthe judgment of the corporation the interests of the corporation will be\nserved thereby, the corporation may sell bonds at private sale. The\ncorporation shall promulgate regulations governing the terms and\nconditions of any such private sales, which regulations shall include a\nprovision that it give notice to the governor, the temporary president\nof the senate, and the speaker of the assembly of its intention to\nconduct a private sale of obligations pursuant to this section not less\nthan five days prior to such sale or the execution of any binding\nagreement to effect such sale.\n (f) The corporation shall enter into an agreement with the comptroller\npursuant to which the comptroller shall be the exclusive agent of the\ncorporation for the sale of its bonds and notes.\n 2. Consistent with the provisions of this title, any resolution\nauthorizing any bonds or notes or any issue thereof may contain\nprovisions, which shall be a part of the contract with the holders\nthereof, as to:\n (a) pledging all or any part of the revenues to secure the payment of\nthe bonds or notes or of any issue thereof, subject to such agreements\nwith bondholders or noteholders as may then exist;\n (b) pledging all or any part of the assets of the corporation to\nsecure the payment of the bonds or notes or of any issue of bonds or\nnotes, subject to such agreements with bondholders or noteholders as may\nthen exist;\n (c) the setting aside of reserves or sinking funds and the regulation\nand disposition thereof;\n (d) limitations on the purposes to which the proceeds of sale of bonds\nor notes may be applied and pledging such proceeds to secure the payment\nof the bonds or notes or of any issue thereof;\n (e) limitations on the issuance of additional bonds or notes; the\nterms upon which additional bonds or notes may be issued and secured;\nand the refunding of outstanding or other bonds or notes;\n (f) the procedure, if any, by which the terms of any contract with\nbondholders or noteholders may be amended or abrogated, the amount of\nbonds or notes the holders of which must consent thereto, and the manner\nin which such consent may be given;\n (g) limitations on the amount of moneys to be expended by the\ncorporation for operating expenses of the corporation;\n (h) vesting in a trustee, as described in subdivision six of this\nsection, such property, rights, powers and duties in trust as the\ncorporation may determine, which may include any or all of the rights,\npowers and duties of the trustee appointed by the bondholders pursuant\nto this title, and limiting or abrogating the right of the bondholders\nto appoint a trustee under this title or limiting the rights, powers,\nand duties of such trustee;\n (i) the acts or omissions to act which shall constitute a default in\nthe obligations and duties of the corporation to the holders of the\nbonds or notes and providing for the rights and remedies of the holders\nof the bonds or notes in event of such default, including the right to\nappointment of a receiver; providing, however, that such rights and\nremedies shall not be inconsistent with the general laws of the state\nand the other provisions of this title;\n (j) any other matters, of like or different character, which in any\nway affect the security or protection of the holders of the bonds or\nnotes; and\n (k) the application of any of the foregoing provisions to any provider\nof any applicable bond or note facility.\n Notwithstanding the foregoing, the corporation shall not be authorized\nto make any covenant, pledge, promise, or agreement purporting to bind\nthe state except as otherwise specifically authorized by this title.\n 3. Any pledge made by the corporation shall be valid and binding from\nthe time when the pledge is made. The revenues or property so pledged\nand thereafter received by the corporation shall immediately be subject\nto the lien of such pledge without any physical delivery thereof or\nfurther act, and the lien of any such pledge shall be valid and binding\nas against all parties having claims of any kind in tort, contract or\notherwise against the corporation, irrespective of whether such parties\nhave notice thereof. Neither the resolution nor any other instrument by\nwhich a pledge is created need be recorded or filed to protect such\npledge.\n 4. Neither the directors of the corporation nor any other person\nexecuting the bonds or notes of the corporation shall be subject to any\npersonal liability or accountability by reason of the issuance thereof.\n 5. The corporation, subject to such agreements with bondholders or\nnoteholders as may then exist, or with the providers of any applicable\nbond or note facility, shall have power out of any funds available\ntherefor to purchase bonds or notes of the corporation, which may or may\nnot thereupon be cancelled, at a price not substantially exceeding:\n (a) if the bonds or notes are then redeemable, the redemption price\nthen applicable, including any accrued interest;\n (b) if the bonds or notes are not then redeemable, the redemption\nprice and accrued interest applicable on the first date after such\npurchase upon which the bonds or notes become subject to redemption.\n 6. In the discretion of the directors of the corporation, the bonds\nand notes may be secured by a trust indenture by and between the\ncorporation and a corporate trustee, or a corporate trustee may be\nappointed under the resolution as provided in subdivision two of this\nsection.\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 or any book-entry-only system.\n 8. (a) The corporation shall not issue any bonds or notes in an amount\nin excess of four billion seven hundred million dollars, plus a\nprincipal amount of bonds or notes:\n (i) to fund any capital reserve fund in accordance with the capital\nreserve fund requirement,\n (ii) to provide capitalized interest for a period not to exceed six\nmonths, and\n (iii) to provide for the payment of fees and other charges and\nexpenses, including underwriters' discount, related to the issuance of\nsuch bonds or notes, or related to the provision of any applicable bond\nor note facilities.\n (b) In computing for the purposes of this section, the aggregate\namount of indebtedness evidenced by bonds and notes of the corporation\nissued pursuant to this title, there shall be excluded (i) the amount of\nbonds or notes issued that would constitute interest under the Code as\namended to the effective date of this title, and (ii) the amount of such\nindebtedness represented by such bonds or notes issued to refund or\notherwise repay bonds or notes, provided that the amount so excluded\nunder this subparagraph (ii) may exceed the principal amount of such\nbonds or notes that were issued to refund or otherwise repay only if the\npresent value of the aggregate debt service on the refunding or\nrepayment bonds or notes shall not have at the time of their issuance\nexceeded the present value of the aggregate debt service of the bonds or\nnotes they were issued to refund or repay, such present value in each\ncase being calculated by using the effective interest rate of the\nrefunding or repayment bonds or notes, which shall be that rate arrived\nat by doubling the semi-annual interest rate (compounded semi-annually)\nnecessary to discount the debt service payments on the refunding or\nrepayment bonds or notes from the payment date thereof to the date of\nissue of the refunding or repayment bonds or notes and to the price bid\ntherefor, or to the proceeds received by the corporation from the sale\nthereof, in each case including estimated accrued interest.\n 9. Each issuance of bonds by the corporation under this title shall\nprovide for the retirement thereof so that debt service thereon,\ncalculated in accordance with reasonably assumed interest rates to the\nextent not then determinable, shall be on a substantially level or\ndecreasing debt-service payment basis no later than one year from the\ndate of their issuance to the date of retirement of the latest bond\nwithin such issue to retire. Each issuance of notes shall provide for\nannual reductions of the aggregate outstanding principal in equal or\nincreasing amounts of such reduction. Notwithstanding the foregoing, if\nthe corporation shall issue refunding bonds, the debt service thereon\nshall be structured on any basis that the corporation deems is in its\nbest interest, provided that debt service on all outstanding bonds,\nnotes and other financial obligations is not increased in any future\nfiscal year after giving effect to such refunding.\n