New Mexico Administrative Code › Title 2 - PUBLIC FINANCE › Chapter 61 - STATE INDEBTEDNESS AND SECURITIES › Part 5 - FINANCING APPROVALS › Section 2.61.5.13 - APPROVAL BY THE STATE BOARD OF FINANCE OF EXCHANGE AGREEMENTS

Current through Register Vol. 35, No. 13, July 16, 2024
A. After review of
				the information required under Section 2.61.5.13.B below, the board may approve
				a proposed exchange agreement by adopting a resolution establishing parameters
				relating to the proposed exchange agreement, subject to confirmation to the
				board staff from the public body after the final bidding or negotiation of the
				exchange agreement that the parameters established in the board resolution were
				satisfied.
B. Information relating
				to the proposed exchange agreement provided to the board for its review shall
				include the following items:
(1) resolution or
				ordinance of the public body relating to the proposed exchange
				agreement.
(2) evaluation of
				financial risk including presentation of detailed scenarios of
(a) the transaction outcome at the maximum
				rate, representing the upside risk to the public body,
(b) the transaction outcome based on the
				current market, and
(c) the
				anticipated transaction outcome based upon the reasonable current expectations
				of the public body that are the bases for the decision to enter into the
				transaction
(3)
				demonstration that financial officials of the public body are knowledgeable
				regarding the market conditions required for or relevant to the exchange
				agreement, and explicit written acknowledgement of the range of potential
				outcomes as demonstrated in the response to item (2) and the acceptance of the
				financial risks and adverse potential outcomes presented therein.
(a) representation that legal counsel, the
				financial advisor or bank representing the public body have explained the legal
				and financial risks, respectively, of the transaction.
(b) explanation of the sizing of the
				transaction in relation to rating agency risk evaluation criteria.
(4) demonstration of an expected
				long-term financial benefit to the public body.
(5) representation by and compensation of
				financial advisor, if any.
(6)
				method of selection of provider.
(7) anticipated timing of
				transaction.
(8) on competitive
				bidding, if applicable, documentation of the bid process and that a minimum of
				three bona-fide bids will be received.
(9) evidence that the provider is rated in
				either of the two highest rating categories of a nationally recognized rating
				agency.
(10) estimated costs
				associated with the exchange agreement, with a break out of all fees paid to
				any natural person, firm, partnership, association or corporation involved in
				obtaining the exchange agreement.
(11) net amount or benefit estimated to be
				received from the exchange agreement.
(12) proposed term of the exchange
				agreement.
(13) draft of proposed
				exchange agreement reflecting termination provisions and collateralization or
				other requirements in event counter-party is downgraded below the two highest
				rating categories and the source of moneys to fund obligations or purchase
				price by issuing authority.
(14)
				draft parameters resolution of the board approving the exchange
				agreement.