California Code of Regulations › Title 4 - Business Regulations › Division 9.6 - California Debt and Investment Advisory Commission › Chapter 1 - General Provisions › Article 1 - Definitions › Section 6000 - Definitions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The following terms as used in this chapter shall have the
					 meaning defined below except where a substitute definition is provided to apply
					 to a specifically named article in this chapter.
(a) "Authority" means an entity created
				  pursuant to Article 1 of the Joint Exercise of Powers Act and authorized to
				  Issue Debt or act as a Purchaser or Lender pursuant to Article 2 or Article 4
				  of the Joint Exercise of Powers Act.
(b) "Bond Counsel" means the attorney or law
				  firm retained by the Issuer to give a legal opinion that the proposed Debt is a
				  legally valid obligation of the Issuer and, to the extent applicable, the
				  interest on the proposed Debt is exempt from federal or state income
				  tax.
(c) "Borrower's Counsel" means
				  the attorney or law firm, retained by the Issuer when the Debt is a direct loan
				  from a bank or other financial institution, who gives a legal opinion that the
				  proposed Debt is a legally valid obligation of the Issuer and, to the extent
				  applicable, the interest on the proposed Debt is exempt from federal or state
				  income tax.
(d) "Capital
				  Appreciation Debt" means any form of Debt that is structured to not require the
				  Issuer to make regular periodic payments of interest to the Creditor(s);
				  alternatively, the unpaid interest accrues and compounds at a stated interest
				  rate.
(e) "Co-Bond Counsel" means
				  the attorney or law firm working on behalf of the Issuer as a Bond Counsel in
				  cooperation with another Bond Counsel.
(f) "Commission" means the California Debt
				  and Investment Advisory Commission or the California Debt Advisory
				  Commission.
(g) "Competitive Sale"
				  means a method, chosen by the Issuer, of effecting a Sale of Debt with a
				  Creditor selected through a formal competitive process among multiple potential
				  Creditors.
(h) "Credit Enhancement"
				  means any form of guaranty, secondary repayment source, or additional
				  credit-improving instrument provided by an entity other than the Issuer or
				  third-party Obligor that improves the likelihood that the Issuer's or Obligor's
				  Debt payment obligations will be met.
(i) "Creditor" means the party in a Debt
				  contract that is obligated to transfer assets, moneys, or rights to the
				  beneficial use of assets to the Issuer, either directly or as an assignee of
				  these obligations, in exchange for one or more payments under the Debt
				  contract. The designation of Creditor in a Debt contract is assigned to
				  financing participants including, but not limited to Underwriters, Purchasers,
				  Lenders, lessors or a Syndicate of such that are bound by agreement to operate
				  as a single Creditor as defined herein.
(j) "Dated Date" means the date from which
				  interest on a Debt Issue starts to accrue.
(k) "Debt" means a contractual agreement
				  through which a Creditor or Creditors transfers assets or moneys of an agreed
				  value or amount, or rights to beneficial use of assets, to an Issuer in
				  exchange for one or more non-cancelable payments, inclusive of an interest
				  component no matter whether it is paid, accrued, or imputed, over a specified
				  period of time, the total present value of which is approximately equal to the
				  value of the assets or rights on or about the time the transfer occurred. The
				  instruments or types of indebtedness that are evidence of Debt include the
				  following, but are not limited to the following if they are an evidence of debt
				  meeting the definition herein:
(1)
				  Bonds
(2) Notes
(3) Loans
(4) Warrants
(5) Certificates of participation
(6) Commercial paper notes
(7) Lines of credit
(8) Installment purchases
(9) Leases that meet any of the following
				  criteria:
(A) The term of the lease, including
				  options to extend, exceeds 75% of the life of the asset.
(B) There is a transfer of ownership to the
				  lessee at the end of the lease term.
(C) Lessee has an option to purchase the
				  asset at the end of the lease term at a price well below market.
(D) The present value of the lease payments,
				  discounted at an appropriate discount rate, exceeds 90% of the fair market
				  value of the leased asset.