Financing

Checkout our iOS App for a better way to browser and research.

  1. The authority shall have the power and is authorized to issue bonds and notes and to enter into lease-purchase agreements and loan agreements for the construction, acquisition, reconstruction, improvement, betterment or extension of any of the properties and facilities described in § 7-56-201 or to assume and agree to pay any indebtedness incurred for any of the foregoing purposes and to enter into interest rate floors or ceilings or both with respect to such bonds, notes, lease-purchase agreements and loan agreements. The proceeds of the sale of such bonds, notes, lease-purchase agreements and loan agreements may be applied to:
    1. Payment of the costs of such construction, acquisition, reconstruction, improvement, betterment or extension;
    2. Payment of the costs associated with any such construction, acquisition, reconstruction, improvement, betterment or extension, including engineering, architectural, inspection, legal and accounting expenses;
    3. Payment of the costs of issuance of such bonds, notes, lease-purchase agreements and loan agreements, including underwriter's discount, financial advisory fee, preparation of the definitive instruments, preparation of all public offering and marketing materials, advertising, liquidity, remarketing, credit enhancement, and legal, accounting, fiscal and other similar expenses;
    4. Payment of interest during the period of construction and for six (6) months thereafter on any money borrowed or estimated to be borrowed;
    5. Reimbursement of the authority for moneys previously spent by the authority for any of the purposes set forth in subdivisions (a)(1)-(4);
    6. Payment of fees, including termination fees associated with interest rate floors and ceilings;
    7. Establishment of reasonable reserves for the payment of debt service on such bonds, notes, lease-purchase agreements and loan agreements, or for repair and replacement to the property and facilities of the authority for whose benefit the financing is being undertaken, or for such other purposes as the board of directors shall deem necessary and proper in connection with the issuance of the bonds, notes, lease-purchase agreements and loan agreements and operation of the facilities and properties for whose benefit the financing is being undertaken;
    8. Contribution of the authority's share of the funding for any joint undertaking for the purposes set forth in this section; and
    9. Contribution by the authority to any subsidiary or separate entity controlled by the authority for the purposes set forth in this subsection (a).
  2. The authority shall have the power and is authorized to issue bonds and notes and to enter into lease-purchase agreements or loan agreements to refund and refinance any outstanding bonds, notes, lease-purchase agreements and loan agreements of the authority heretofore or hereafter issued or lawfully assumed by the authority and to enter into interest rate floors or ceilings or both with respect to such bonds, notes, lease-purchase agreements and loan agreements. The proceeds of the sale of the refunding bonds, notes, lease-purchase agreements or loan agreements may be applied to:
    1. Payment of the principal amount of the bonds, notes, lease-purchase agreements or loan agreements being refunded and refinanced;
    2. Payment of the redemption premium on bonds, notes, lease-purchase agreements or loan agreements, if any;
    3. Payment of unpaid interest on the bonds, notes, lease-purchase agreements or loan agreements being refunded, including interest in arrears, for the payment of which sufficient funds are not available, to the date of delivery or exchange of the refunding bonds, notes, lease-purchase agreements or loan agreements;
    4. Payment of interest on the bonds, notes, lease-purchase agreements or loan agreements being refunded and refinanced from the date of delivery of the refunding bonds, notes, lease-purchase agreements or loan agreements to maturity or to and including the first or any subsequent available redemption date or dates on which the bonds, notes, lease-purchase agreements or loan agreements being refunded may be called for redemption;
    5. Payment of the costs of issuance of the refunding bonds, notes, lease-purchase agreements or loan agreements, including underwriter's discount, financial advisory fee, preparation of the definitive instruments, preparation of all public offering and marketing materials, advertising, credit enhancement, liquidity, remarketing, and legal, accounting, fiscal and other similar expenses, and the costs of refunding the outstanding bonds, notes, lease-purchase agreements or loan agreements, including the costs of establishing an escrow for the retirement of the outstanding bonds, notes, lease-purchase agreements or loan agreements, trustee and escrow agent fees in connection with the escrow, and accounting, legal and other professional fees in connection therewith;
    6. Payment of fees, including termination fees associated with interest rate floors and ceilings; and
    7. Establishment of reasonable reserves for the payment of debt service on the refunding bonds, notes, lease-purchase agreements or loan agreements, or for repair, improvement and replacement to the properties or facilities of the authority for whose benefit the financing is being undertaken, or for such other purposes as shall be deemed necessary and proper in connection with the issuance of the refunding bonds, notes, lease-purchase agreements or loan agreements and operation of the properties and facilities for whose benefit the financing is being undertaken. Refunding bonds, notes, lease-purchase agreements or loan agreements may be issued to refinance and refund any issue and more than one issue of outstanding bonds, notes, lease-purchase agreements or loan agreements, notwithstanding that such outstanding bonds, notes, lease-purchase agreements or loan agreements may have been issued at different times and regardless of whether the prior issue was a bond, note, lease-purchase agreement or loan agreement. The principal proceeds from the sale of refunding bonds, notes, lease-purchase agreements or loan agreements may be applied either to the immediate payment and retirement of the bonds, notes, lease-purchase agreements or loan agreements being refunded or, to the extent not required for the immediate payment of the bonds, notes, lease-purchase agreements or loan agreements being refunded, to the deposit in escrow with a bank or trust company to provide for the payment and retirement at a later date of the bonds, notes, lease-purchase agreements or loan agreements being refunded.
  3. The authority shall have the power and is authorized to issue revenue anticipation notes in anticipation of the collection of revenues from the properties and facilities described in § 7-56-201 and issue negotiable notes to evidence such borrowing, the proceeds from the sale of such notes to be used for the purpose of paying the cost of construction of additions, betterments and improvements to and extensions of the properties and facilities. The revenues, including rates, fees and charges for the services, facilities and commodities of the authority, and grants, loans and other assistance received from the state, any county and municipality and any federal, state, county or municipal agency, may be, together with a mortgage or deed of trust on the property financed, pledged to the payment of such notes. Such notes shall be sold in such manner and upon such terms and conditions as may be determined by the board of directors. The governing body may issue bonds for the funding of such notes.
  4. No bonds, notes, lease-purchase agreements or loan agreements, including instruments to refund or refinance the bonds, notes, lease-purchase agreements or loan agreements, shall be issued or assumed under this subsection (d) unless authorized to be issued or assumed by resolution of the board of directors, which resolution may be adopted at the same meeting at which it is introduced by a majority of all members of the board then in office, and shall take effect immediately upon adoption. Bonds, notes, lease-purchase agreements and loan agreements authorized to be issued under this subsection (d), including instruments to refund or refinance the bonds, notes, lease-purchase agreements or loan agreements, may be issued in one or more series, may bear such date or dates, mature at such time or times, not exceeding forty (40) years from their respective dates, bear interest at such rate or rates, which may vary from time to time, payable at such time or times, be in such denominations, be in such form, either coupon or registered, be executed in such manner, be payable in such medium of payment, at such place or places, and be subject to such terms of redemption, with or without premium, as such resolution or resolutions may provide. These bonds, notes, lease-purchase agreements and loan agreements, including instruments to refund or finance the bonds, notes, lease-purchase agreements or loan agreements, may be issued for money or property at competitive or negotiated sale for such price or prices as the board of directors shall determine. Pending the preparation or execution of definitive bonds or notes, interim receipts, certificates or temporary bonds may be delivered to the purchaser or purchasers of those bonds or notes.
  5. Bonds, notes, lease-purchase agreements and loan agreements, including instruments to refund or refinance the bonds, notes, lease-purchase agreements or loan agreements, may be repurchased by the authority out of any available funds at a price not to exceed the principal amount of the bonds, notes, lease-purchase agreements or loan agreements, and accrued interest, and if so repurchased shall be canceled or held as an investment of the authority as the board of directors may determine.
  6. When entering into any contracts or agreements facilitating the issuance and sale of bonds, notes, lease-purchase agreements or loan agreements, including instruments to refund or refinance the bonds, notes, lease-purchase agreements or loan agreements, and contracts or agreements providing for liquidity and credit enhancement and reimbursement agreements relating to the bonds, notes, lease-purchase agreements or loan agreements, agreements establishing interest rate floors or ceilings or both, evidencing a transaction bearing a reasonable relationship to this state and also to another state or nation, the authority may agree in the written contract or agreement that the rights and remedies of the parties to the contract or agreement shall be governed by the laws of this state or the laws of such other state or nation; provided, that jurisdiction over the authority shall lie solely in a court of Tennessee that would otherwise have jurisdiction of actions brought in contract against the authority.
  7. No owner or owners of any bonds, notes, lease-purchase agreements and loan agreements issued under this section, including instruments to refund or refinance the bonds, notes, lease-purchase agreements or loan agreements, shall ever have the right to compel any exercise of the taxing powers of the state or any municipality, county or other political subdivision of the state to pay those bonds, notes, lease-purchase agreements and loan agreements or the interest on the bonds, notes, lease-purchase agreements or loan agreements. Each bond, note, lease-purchase agreement and loan agreement issued under this section by the authority shall recite in substance that the bond, note, lease-purchase agreement and loan agreement, including the interest on the bonds, notes, lease-purchase agreements or loan agreements, is payable solely from the revenues pledged to the payment of the bonds, notes, lease-purchase agreements or loan agreements, and that the bond, note, lease-purchase agreement and loan agreement does not constitute a debt of the state, any municipality, county or other political subdivision.
  8. Bonds, notes, lease-purchase agreements and loan agreements issued under this section, including instruments to refund or refinance the bonds, notes, lease-purchase agreements or loan agreements, bearing the signature of the chair in office on the date of the signing shall be valid and binding obligations, notwithstanding that before the delivery and payment any or all the persons whose signatures appear on the bonds, notes, and agreements shall have ceased to be officers. The validity of such bonds, notes, lease-purchase agreements and loan agreements shall not be dependent on nor affected by the validity or regularity of any proceedings relating to the acquisition or improvement of the facilities or properties for which those bonds, notes, lease-purchase agreements and loan agreements are issued. The resolution or resolutions authorizing bonds, notes, lease-purchase agreements and loan agreements under this section may provide that the bonds, notes, lease-purchase agreements and loan agreements shall contain a recital that they are issued pursuant to this section, which recital shall be conclusive evidence of their validity and of the regularity of their issuance.
  9. In connection with the issuance of bonds, notes, lease-purchase agreements and loan agreements, including instruments to refund or refinance the bonds, notes, lease-purchase agreements or loan agreements, and in order to secure the payment of the bonds, notes, lease-purchase agreements or loan agreements and other contracts entered into relating to the foregoing, the authority shall have power to:
    1. Secure and covenant, as set forth in §§ 9-21-306 and 7-34-110, as such provisions shall from time to time be amended, excluding provisions relating solely to water, sewer and parking systems;
    2. Pledge all or any part of its revenues, fees, rates, rentals, tolls, and charges it receives for the services of the facilities and from any grants, loans and other assistance received from the state, any county or municipality, and any state, federal, county or municipal agency;
    3. Pledge all or any part of its property, real or personal, tangible or intangible, including granting mortgages and entering into deeds of trust, in connection therewith;
    4. Vest in a trustee or trustees the right to enforce any covenant made to secure, to pay, or in relation to its bonds, notes, lease-purchase agreements and loan agreements, to provide for the powers and duties of such trustee or trustees, to limit the liabilities thereof, and to provide the terms and conditions upon which the trustee or trustees or the holders of bonds or any amount or proportion of them may enforce any such covenant; and
    5. Make such covenants and do any and all such acts and things as may be necessary, convenient or desirable in order to secure its bonds or that, in the absolute discretion of the board of directors, tend to make the bonds, notes, lease-purchase agreements and loan agreements more marketable, notwithstanding that such covenants, acts and things may restrict or interfere with the exercise of the powers granted in this section; it being the intention of this section to give the authority power to do all things in the issuance of such instruments, and for their security, that a private business corporation can do under the general laws of the state.
  10. In addition to all other rights and all other remedies, any holders of bonds, notes, lease-purchase agreements and loan agreements, including instruments to refund or refinance the bonds, notes, lease-purchase agreements or loan agreements, including a trustee for bondholders or noteholders, shall have the right, by:
    1. Mandamus or other suit, action or proceeding at law or in equity, to enforce the holder's rights against the authority and the board of the authority, including the right to require the authority and such board to fix and collect rates and charges adequate to carry out any agreement as to, or pledge of, the revenues produced by such rates or charges, to take all actions permitted under any deed of trust related to the instruments, and to require the authority and such board to carry out any other covenants and agreements with such bondholders and to perform its and their duties under this section;
    2. Action or suit in equity to enjoin any acts or things that may be unlawful or a violation of the rights of such holder or holders of bonds, notes, lease-purchase agreements and loan agreements;
    3. Suit, action or proceeding in a court in the state having jurisdiction over the authority to obtain an appointment of a receiver of any system or systems of the authority or any part or parts of the system or systems. If such receiver be appointed, such receiver may enter and take possession of such system or systems or part or parts of the system or systems and operate and maintain those systems or parts, and collect and receive all fees, rents, tolls or other charges thereafter arising from the systems or parts in the same manner as the authority might do and shall dispose of such money in a separate account or accounts and apply the same in accordance with the obligations of the authority as the court shall direct; and
    4. Suit, action or proceeding in a court in the state having jurisdiction over the authority to require the board of the authority to account as if it were the trustee of an express trust.
  11. The authority shall, however, prescribe and collect reasonable rates, fees or charges for the services, facilities and commodities made available by it, and shall revise such rates, fees or charges from time to time whenever necessary so that facilities and properties authorized in this section shall be and always remain self-supporting. The rates, fees, or charges shall be such as will produce revenue at least sufficient to:
    1. Provide for the payment of all expenses of operation and maintenance of such facilities and properties;
    2. Pay when due principal and interest on all bonds, notes, lease-purchase agreements and loan agreements, including instruments of the authority issued to refund or refinance the bonds, notes, lease-purchase agreements or loan agreements, payable from the revenues of such facilities and properties;
    3. Pay any other contracts and agreements of the authority; and
    4. Establish proper reserves.
  12. Any pledge of, or lien on, revenues, fees, rents, tolls, governmental grants, loans and other assistance, or other charges received or receivable by the authority to secure the payment of any bonds, notes, lease-purchase agreements or loan agreements of the authority, and the interest on the bonds, notes, lease-purchase agreements or loan agreements, shall be valid and binding from the time that the pledge or lien is created or granted and shall inure to the benefit of the owner or owners of any such bonds, notes, lease-purchase agreements and loan agreements until the payment in full of the principal and premium and interest. The priority of any pledge or lien with respect to competing pledges or liens shall be determined by the date such pledge or lien is created or granted; provided, that the proceedings authorizing any issue of bonds, notes or delivery of lease-purchase agreements or loan agreements may provide for the issuance of additional obligations on a parity of lien with the bonds, notes, lease-purchase agreements or loan agreements. Neither the resolution nor any other instrument granting, creating, or giving notice of the pledge or lien need be filed or recorded to preserve or protect the validity or priority of such pledge or lien.
  13. Any bonds, notes, lease-purchase agreements and loan agreements issued by the authority pursuant to this section, and the income from the bonds, notes, lease-purchase agreements or loan agreements, shall be exempt from all state, county and municipal taxation, except inheritance, transfer and estate taxes, and except as otherwise provided by the general laws of the state.
  14. All funds of the authority shall be invested in accordance with the requirements for investments for cities and counties, including proceeds of bonds, notes, lease-purchase agreements and loan agreements and refunding bonds, notes, lease-purchase agreements and loan agreements.
  15. The state, any county or municipality and any federal, state, county or municipal agency or authority is authorized to agree to subordinate any interests it may have for repayment of funds received from any such grants and loans, including repayment of funds received from the state department of transportation, referenced in § 7-56-205(11), to the repayment of bonds, notes, lease-purchase agreements or loan agreements of the authority authorized in this section.
  16. Any county or municipality participating in an authority is authorized to issue bonds or notes for the purposes in this section authorized pursuant to the Local Government Public Obligations Act of 1986, compiled in title 9, chapter 21, and to grant or loan the proceeds of such bonds or notes to the authority. The authority is authorized to enter into a loan agreement with or issue its bond or note to any city or county, or both, for the purpose of receiving or repaying, or both, such grants or loans, or both, in accordance with this section. Such county or municipality is authorized to pledge its full faith and credit and unlimited ad valorem taxing power to the repayment of such bonds and notes. Such county or municipality is further authorized to pledge any payments it receives from the authority under such loan agreement to the repayment of such city or county's bonds or notes.
  17. Section 9-11-108 shall apply for the purpose of issuing funding bonds.
  18. Title 9, chapter 19 shall apply to the registration and execution of registered bonds and notes of the authority.
  19. The authority may borrow money and create security interests only if approved in writing by the commissioner of transportation after the department receives assurances satisfactory to the commissioner that the authority's ability to fulfill its obligations to the state shall not be impaired.


Download our app to see the most-to-date content.