KRS § 103.220 — KY Code / Title IX / Chapter 103 / Section 103.220
103.220 Interest on bonds -- Terms -- Approval -- Marketing -- Refunding
Status: in_force

103.220 Interest on bonds -- Terms -- Approval -- Marketing -- Refunding.

(1) The bonds may be issued to bear interest at any rate or rates, either fixed or variable,

in accordance with such method as shall be set by the governing body of the issuer,

payable either annually or at shorter intervals, may be of such terms and maturities,

may bear such conversion privileges, may be executed by the manual or facsimile

signatures of such officers of the issuer and shall be executed in such manner and at

such time or times or from time to time and be payable at such times not exceeding

forty (40) years from the date thereof, or if commercial paper, from the date of

issuance thereof, and at such place or places as the governing body of the issuer

determines.

(2) The bonds may provide that they or any of them may be called for redemption prior

to maturity under conditions set by the governing body of the issuer before issuing

the bonds.

(3) (a) Any bonds issued and outstanding hereunder may, at any time on or after the

earliest redemption date provided therefor at the time of their issuance, be

refunded by the issuer or any other city, county or authority, with the consent

of the lessee, industrial concern or utility company, in such amount as the

governing body may deem necessary to refund the principal of the bonds to be

refunded, together with any unpaid interest thereon, to create any necessary

debt service reserve fund, and to pay the costs of any improvements or

additions to the project, and of any premiums, expenses and commissions

required to be paid in connection therewith. Any refunding bonds issued under

the authority of this section shall be payable from the revenues out of which

the bonds to be refunded were payable.

(b) At the time of the initial issuance of the bonds, the issuer may designate

individual officials of its governing body as agent for purposes of approving

the principal amount, the interest rate, the discount, if any, and the maturity

date of bonds being issued later to refund the maturing bonds; provided,

however, that, at the time of the initial issuance of such bonds, the governing

body of the issuer shall set the maximum principal amount, the maximum

interest rate, and the maximum discount, if any, of the refunding bonds plus

the final maturity date of the last issue of such refunding bonds; and provided

further that the issuer shall retain the right to revoke any such agent's authority

at any time and for any reason whatsoever. Individual issues of commercial

paper, issued as part of a continuing financing program, may be refunded by

the approvals of such agent of the issuer and separate proceedings of the issuer

pursuant to KRS 103.210 shall not be required.

(c) At the time of issuance of bonds which bear interest at a variable rate or rates,

the governing body of the issuer may designate individuals or institutions who

in the sole judgment of such governing body have financial market expertise

to serve as agent for the issuer for establishing and changing from time to time

while such bonds remain outstanding the rate of interest to be borne by and

the price to be paid for the bonds; provided, however, that the rate-setting

procedures and authority of each such agent shall be set forth in writing, and

may include a formula or an index or indices based upon market factors, and

shall be established by the issuer at the time of issuance of such bonds; and

provided further that at the time of the issuance of the bonds, the governing

body of the issuer shall establish the maximum interest rate to be borne by the

bonds; and provided further that the issuer shall retain the right to remove or

replace any such agent at any time and for any reason whatsoever.

(4) Any bonds issued and outstanding hereunder and the coupons appertaining to such

bonds shall prior to the maturity or redemption date thereof be deemed to have been

paid to the same extent as if they had actually been paid in cash and retired, if:

(a) In case any of such bonds are to be redeemed on any date prior to their

maturity, the issuer of such bonds shall have given a trustee appointed for the

holders of such bonds in connection with their issuance, in form satisfactory

to such trustee and in conformity with the requirements of the ordinance or

resolution authorizing their issuance, irrevocable instructions to give notice of

redemption of such bonds to the holders thereof by publication or by other

method which is satisfactory to such trustee;

(b) There shall have been deposited with the trustee either money in an amount

which shall be sufficient, or direct obligations of or obligations guaranteed by

the United States of America, the principal of and the interest on which, when

due, will provide money which, together with the money, if any, deposited

with the trustee at the same time, shall be sufficient to pay when due the

principal and the interest due and to become due on such bonds on and prior

to redemption date or maturity date thereof, as the case may be; and

(c) In the event that such bonds are not to be redeemed within the next succeeding

sixty (60) days, the issuer shall have given the trustee in form satisfactory to it

irrevocable instructions to give, as soon as practicable, in a manner

satisfactory to it, a notice to the holders of such bonds and coupons that the

deposit required by paragraph (b) of this subsection has been made with the

trustee, that such bonds and coupons are deemed to have been paid in

accordance with the provisions hereof and stating such maturity or redemption

date upon which money is to be available for the payment of the principal of

and interest on such bonds. Any deposits made under paragraph (b) of this

subsection, to the extent not secured by the Federal Deposit Insurance

Corporation, shall be secured by the pledging of direct obligations of or

obligations guaranteed by the United States of America.

(5) It is hereby declared and determined that the issuance of any and all refunding

bonds as provided herein will be for a public purpose if the legislative body of the

issuer authorizing such bonds so declares in the proceedings authorizing same, it

being hereby declared and determined that the ability of any domestic or foreign

corporation renting or leasing any facilities financed by the bonds to cause

refunding bonds to be issued will be an inducement for such domestic or foreign

corporation to establish in Kentucky the facilities provided for in KRS 103.210 and

will tend to further the purposes of KRS 103.200 to 103.285.

(6) No bonds shall be issued hereunder in violation of federal statutes or regulations

prohibiting arbitrage profits.