§ 45-12-5.4 - Cities or towns with a population greater than 125,000 inhabitants – Variable rate obligations and interest exchange agreements.
SECTION 45-12-5.4
§ 45-12-5.4 Cities or towns with apopulation greater than 125,000 inhabitants – Variable rate obligationsand interest exchange agreements. – (a) In connection with the issuance of duly authorized bonds, notes or otherobligations of a city or town with a population greater than one hundredtwenty-five thousand (125,000) inhabitants, notwithstanding any other authorityto the contrary, such bonds, notes or other obligations may be issued in theform of variable rate obligations, so-called. In connection therewith, any suchcity or town, acting through its finance director or treasurer, may enter intoagreements with banks, trust companies or other financial institutions withinor without the state, whether in the form of letters or lines of credit,liquidity facilities, insurance or other support arrangements. Any bonds, notesor other obligations issued as variable rate obligations shall bear such termsas may be fixed by the vote or resolution of the city or town authorizing thebonds, notes or other obligations, or in absence of foregoing such terms as thefinance director or treasurer shall determine, including provisions forprepayment at any time with or without premium at the option of the city ortown, may be sold at a premium or discount, and may bear interest or not and ifinterest bearing, may bear interest at such rate or rates variable from time totime as determined by such index, banking loan rate or other method specifiedin any such agreement. Any such agreement may also include such other covenantsand provisions for protecting the rights, security and remedy of the lenders asmay, in the discretion of the finance director or treasurer, be reasonable andproper and not in violation of law. The finance director or treasurer of thecity or town may also enter into agreements with brokers for the placement ormarketing of any such bonds, notes or other obligations issued as variable rateobligations.
(b) In addition, the finance director or treasurer of a cityor town with a population greater than one hundred twenty-five thousand(125,000) inhabitants, with the approval of the city or town council, may fromtime to time, enter into and amend interest rate exchange agreements,including, but not limited to, interest rate "caps," "floors," "collars," or"swaps" that the finance director or treasurer determines to be necessary ordesirable for the purpose of generating savings, managing an interest rate, orsimilar risk that arises in connection with, or subsequent to or is incidentalto the issuance, carrying or securing of variable rate obligations, fixed ratebonds or fixed rate obligations. Such interest rate exchange agreements shallcontain such provisions, including payment, term, security, default and remedyprovisions, and shall be with such parties, as the finance director ortreasurer shall determine to be necessary or desirable after due considerationto the creditworthiness of those parties. Any municipal public buildingsauthority established pursuant to title 45, chapter 50 of the general laws andany redevelopment agency operating pursuant to title 45, chapter 31 of thegeneral laws, which public buildings authority or redevelopment agency has beenestablished by a city or town with a population greater than one hundredtwenty-five thousand (125,000) inhabitants, shall also have the authority toenter into interest rate exchange agreements as set forth in this paragraph.