Bond forward agreements
 36. (1) If the City has passed a by-law authorizing the issue or refinancing of debentures denominated in Canadian currency, the City may enter a bond forward agreement in order to minimize the cost or risk associated with the debentures because of fluctuations in interest rates.  O. Reg. 610/06, s. 36 (1). (2) A bond forward agreement shall provide for the following matters: 1.  Borrowing and selling one or more debt instruments issued by the Government of Canada or the Province of Ontario (“government debt instruments”). 2.  Buying back the government debt instruments. 3.  Specifying a settlement day, which is a specified future date or the date on which a specified future event occurs. 4.  Requiring a settlement payment to be payable on the settlement day if there is a difference between the price at which the government debt instruments are sold as described in paragraph 1 and the price at which they are bought back as described in paragraph 2. 5.  Specifying that delivery of a document evidencing the government debt instrument is not required under the agreement.  O. Reg. 610/06, s. 36 (2). (3) The City shall not enter a bond forward agreement if the total value of the principal of the government debt instruments borrowed and sold as described in paragraph 1 of subsection (2) exceeds the total value of the principal of the debentures whose cost or risk the agreement is intended to minimize.  O. Reg. 610/06, s. 36 (3). (4) If the City enters a bond forward agreement the City shall monitor the value of the government debt instruments described in paragraph 1 of subsection (2) on each business day after the agreement is executed and before the settlement day described in paragraph 3 of subsection (2), but the City shall not obtain the information about the value of the instruments from any person who has a financial interest in the agreement or in the instruments.  O. Reg. 610/06, s. 36 (4). (5) The City shall not enter a bond forward agreement under which the settlement day described in paragraph 3 of subsection (2) is on or before the day that is 12 months after the day on which the agreement is executed.  O. Reg. 610/06, s. 36 (5); O. Reg. 297/09, s. 3; O. Reg. 47/18, s. 1. (6) The City shall not enter a bond forward agreement under which the settlement payment exceeds the difference in price described in paragraph 4 of subsection (2).  O. Reg. 610/06, s. 36 (6). (7) The City shall not enter a bond forward agreement except with a bank listed in Schedule I, II or III to the Bank Act (Canada) and only if the bank’s long-term debt obligations on the day the agreement is entered are rated, (a)  by Dominion Bond Rating Service as “A(high)” or higher; (b)  by Fitch Ratings as “A+” or higher; (c)  by Moody’s Investors Service Inc. as “A1” or higher; or (d)  by Standard and Poor’s as “A+” or higher.  O. Reg. 610/06, s. 36 (7). (8) The City shall not sell or lend a bond forward agreement.  O. Reg. 610/06, s. 36 (8). (9) If the bond forward agreement relates to debentures to be issued or refinanced for the purposes of another municipality, the City and the other interested municipalities may enter one or more agreements relating to the costs of the bond forward agreement and relating to other matters arising from the bond forward agreement.  O. Reg. 610/06, s. 36 (9). (10) The City shall not use the proceeds from a bond forward agreement except for the following purposes: 1.  To pay the interest or repay the principal of the debentures to which the agreement relates. 2.  For any purpose for which the debentures were issued. 3.  To pay the interest or repay the principal of any outstanding temporary borrowing under section 4 in connection with the debentures. 4.  To pay the interest or repay the principal of any other outstanding borrowing by the City for a capital expenditure.  O. Reg. 610/06, s. 36 (10).