(1) A related agency with the approval of the State Treasurer, or the State Treasurer on behalf of a related agency, may enter into agreements for exchange of interest rates with counterparties. Agreements for exchange of interest rates may be made to manage payment, interest rate, spread or similar exposure undertaken in connection with a related bond upon a determination by the related agency, or by the State Treasurer on behalf of the related agency, that the agreement benefits the State of Oregon.

Terms Used In Oregon Statutes 286A.110

  • Agreement for exchange of interest rates: means a contract, or an option or forward commitment to enter into a contract, for the exchange of interest rates that provides for:

    (a) Payments based on levels of or changes in interest rates; or

    (b) Provisions to hedge payment, rate, spread or similar exposure including, but not limited to, an interest rate floor or cap or an option, put or call. See Oregon Statutes 286A.001

  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Related agency: means the state agency that requests the State Treasurer to issue bonds pursuant to ORS § 286A. See Oregon Statutes 286A.001
  • Related bond: means a bond for which the State of Oregon enters into an agreement for exchange of interest rates. See Oregon Statutes 286A.001

(2) Subject to covenants applicable to a related bond and the limitations of this section, payments required under an agreement for the exchange of interest rates by the related agency, or the State Treasurer on behalf of the related agency, may:

(a) Be treated as interest payments on the related bond;

(b) Be made from revenues or other moneys that are pledged or otherwise committed to pay the related bond; and

(c) Rank in an order of priority of payment relative to the payment of the related bond as the related agency, or the State Treasurer on behalf of the related agency, determines.

(3) In connection with entering into an agreement under this section, a related agency, or the State Treasurer on behalf of the related agency, may enter into a credit enhancement device for an agreement for exchange of interest rates.

(4) An agreement for exchange of interest rates is subject only to the limitations of this section and is not subject to a limitation applicable to the related bond.

(5) With the approval of the State Treasurer, a related agency may use moneys derived from the issuance and sale of bonds to pay termination payments due under an agreement entered into under this section.

(6) A related agency, with the approval of the State Treasurer, may:

(a) Create reserves to pay amounts due under an agreement for exchange of interest rates; and

(b) Fund the reserves with moneys derived from the issuance and sale of bonds or from revenues or other moneys described in subsection (2)(b) of this section. [2007 c.783 § 10]

 

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