The agency may enter into an agreement with a third party for an exchange of interest rates under this section. With respect to bonds or notes outstanding or proposed to be issued bearing interest at a variable rate, the agency may agree to pay sums equal to interest at a fixed rate or at a different variable rate determined in accordance with a formula set out in the agreement on an amount not exceeding the outstanding principal amount of the bonds or notes at the time of payment, in exchange for an agreement by the third party to pay sums equal to interest on a like amount at a variable rate determined according to a formula set out in the agreement. With respect to bonds or notes outstanding or proposed to be issued bearing interest at a fixed rate or rates, the agency may agree to pay sums equal to interest at a variable rate determined according to a formula set out in the agreement on an amount not exceeding the outstanding principal amount of the bonds or notes at the time of payment in exchange for an agreement by the third party to pay sums equal to interest on a like amount at a fixed rate or rates set out in the agreement. Subject to any applicable covenants of the agency, payments required to be made by the agency under the swap agreement, including termination payments, may be made from amounts pledged or available to pay debt service on the bonds or notes with respect to which the swap agreement was made or from any other available source of the agency. The agency may issue bonds or notes to provide for any payment, including a termination payment, due or to become due under a swap agreement.
History:2000 c 424 s 1