2014 Idaho Statutes
Title 39 - HEALTH AND SAFETY
Chapter 14 - HEALTH FACILITIES
Section 39-1447A - PUBLIC SECURITIES OF HEALTH INSTITUTIONS -- INTEREST EXCHANGE AGREEMENTS.
(2) An authorized entity that has issued or entered into, or proposes to issue or enter into, public securities may enter into an agreement for an exchange of payments based on interest rates or for a hedge of interest rates as provided in this section if the authorized entity finds that such an agreement would be in the best interest of the authorized entity.
(3) An authorized entity may enter into an agreement to exchange payments based on interest rates or to hedge interest rates only if:
(4) An authorized entity may agree, with respect to public securities that the authorized entity has issued or entered into, or proposes to issue or enter into, bearing interest at a variable rate, to pay sums equal to interest at a fixed rate or rates or at a different variable rate determined pursuant to a formula set forth in the agreement on an amount not to exceed the principal amount of the public securities with respect to which the agreement is made, in exchange for an agreement to pay sums equal to interest on the same principal amount at a variable rate determined pursuant to a formula set forth in the agreement.
(5) An authorized entity may agree, with respect to public securities that the authorized entity has issued or entered into, or proposes to issue or enter into, bearing interest at a fixed rate or rates, to pay sums equal to interest at a variable rate determined pursuant to a formula set forth in the agreement on an amount not to exceed the outstanding principal amount of the public securities with respect to which the agreement is made, in exchange for an agreement to pay sums equal to interest on the same principal amount at a fixed rate or rates set forth in the agreement.
(6) An authorized entity may, with respect to public securities that the authorized entity has issued or entered into, or proposes to issue or enter into, bearing interest at a fixed rate or rates or at a variable rate or rates, or with respect to securities with respect to which it has entered into an interest rate exchange agreement as described in subsection (4) or (5) of this section, enter into an interest rate hedge agreement to hedge future interest rates including, without limitation, an interest rate cap agreement, an interest rate floor agreement or any combination thereof, on a specified principal sum in exchange for a sum of money or an agreement to pay sums equal to interest on the same principal amount at a fixed rate or rates or variable rate or rates set forth in the agreement.
(7) The term of an agreement entered into pursuant to this section must not exceed the term of the public securities with respect to which the agreement was made.
(8) An agreement entered into pursuant to this section is not a debt or indebtedness or liability of the authorized entity for the purposes of any limitation upon the debt or indebtedness or liability of the authorized entity or any requirement for an election with regard to the issuance of debt or indebtedness or liability that is applicable to the authorized entity.
(9) Limitations upon the rate of interest on a public security do not apply to interest paid pursuant to an agreement entered into pursuant to this section.
(10) An authorized entity which has entered into an agreement pursuant to this section with respect to those public securities may treat the amount or rate of interest on the public securities as the amount or rate of interest payable after giving effect to the agreement for the purpose of calculating:
(11) Subject to covenants applicable to the public securities, any payments required to be made by the authorized entity under the agreement may be made from money pledged to pay debt service on the public securities with respect to which the agreement was made or from any other legally available source.
History:
[39-1447A, added 2005, ch. 270, sec. 1, p. 832.]
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