§ 35-8-27. Variable rate obligations and interest rate exchange agreements.
(a) In connection with the issuance of duly authorized bonds or notes of the state, notwithstanding
any other authority to the contrary, such bonds or notes may be issued in the form
of variable rate obligations, so-called. In connection therewith, the state, acting
through the general treasurer, may enter into agreements with banks, trust companies
or other financial institutions within or without the state, whether in the form of
letters or lines of credit, liquidity facilities, insurance or other support arrangements.
Any debt issued as variable rate obligations shall bear such terms as the general
treasurer shall determine, including provisions for prepayment at any time with or
without premium at the option of the state, may be sold at a premium or discount,
and may bear interest or not and if interest bearing, may bear interest at such rate
or rates variable from time to time as determined by such index, banking loan rate
or other method specified in any such agreement. Any such agreement may also include
such other covenants and provisions for protecting the rights, security and remedy
of the lenders as may, in the discretion of the general treasurer, be reasonable and
proper and not in violation of law. The general treasurer may also enter into agreements
with brokers for the placement or marketing of any such debt or notes of the state
issued as variable rate obligations.
(b) In addition, the general treasurer, with the approval of the governor, may from time
to time, enter into and amend interest rate exchange agreements including, but not
limited to, interest rate "caps�, "floors�, "collars�, or "swaps� that the general
treasurer determines to be necessary or desirable for the purpose of generating savings,
managing an interest rate, or similar risk that arises in connection with, or subsequent
to or is incidental to the issuance, carrying or securing of variable rate obligations,
fixed rate bonds or fixed rate obligations. Such interest rate exchange agreements
entered into by the state shall contain such provisions, including payment, term,
security, default and remedy provisions, and shall be with such parties, as the general
treasurer shall determine to be necessary or desirable after due consideration to
the creditworthiness of those parties.