Oregon Administrative Rules › Chapter 170 - OREGON STATE TREASURY › Division 60 - OREGON MUNICIPAL DEBT ADVISORY COMMISSION › Section 170-060-1010 - Terms, Conditions, and Reporting Requirements for an Agreement for Exchange of Interest Rates

Current through Register Vol. 63, No. 7, July 1, 2024
(1)
			 Public bodies shall only enter into agreements for the exchange of interest
			 rates as authorized by, and in compliance with, ORS
			 287A.335.
(2) Amount. The notional amount of an
			 agreement that relates to outstanding borrowing may not exceed the outstanding
			 principal amount of the borrowing when the agreement is entered into. The
			 notional amount of an agreement that relates to a borrowing that the public
			 body expects to issue in the future may not exceed the principal amount of the
			 borrowing reasonably anticipated to be outstanding when payments are required
			 to commence under the agreement (as evidenced by a copy of the resolution,
			 minutes of the board or other authorizing directive of the director or board as
			 required by section 3 of this rule).
(3) Authorization. With respect to an
			 obligation or obligations that a public body has issued or will issue (as
			 evidenced by a copy of the resolution, minutes of the board or other
			 authorizing directive of the director or board), subject to ORS
			 287A.335 or as the same may be
			 amended in the future, the public body may designate the particular obligation
			 to which an agreement relates after execution of the agreement. Such a
			 designation after execution of the agreement shall be considered an agreement
			 modification, and the public body shall notify the MDAC of such modification in
			 accordance with this rule.
(4) Swap
			 Policy. The public body shall have adopted a swap policy as part of its ongoing
			 responsibility to manage its debt obligations. In adopting a swap policy, the
			 public body should review and consider the current edition of the Government
			 Finance Officers Association Recommended Practice: "Use of Debt-Related
			 Derivatives Products and the Development of a Derivatives Policy" and the "MDAC
			 Sample Interest Rate Swap Policy". Included in the swap policy, the public body
			 shall provide a general description of risks related to agreements for exchange
			 of interest rates and the means by which the public body will address those
			 risks. The swap policy shall also provide that an analysis of the risks and
			 benefits of each agreement shall be presented to the governing body prior to
			 executing such agreement.
(5) MDAC
			 Notice. The public body shall notify the MDAC of the execution of an agreement
			 for the exchange of interest rates by delivering to the OST, as provided in OAR
			 170-055-0001(3), within 30-days of its execution, the following:
(a) An MDAC Form 3.
(b) An executed copy of the resolution,
			 minutes of the board or other authorizing directive of the director or board,
			 specifically authorizing the public body to engage and participate in an
			 agreement for the exchange of interest rates. The authorization shall state the
			 reason that the public body is authorizing the agreement, shall include a
			 finding that the agreement is being executed for permitted purposes and
			 complies with the authorizing act and this rule.
(c) The public body's swap policy.
(d) The legal opinion, if any, addressing the
			 validity of the public body's obligations under the agreement for the exchange
			 of interest rates that is delivered in connection with the agreement.