TITLE 36 LOCAL GOVERNMENT

Chapter 82 information not found

ARTICLE 11 INTEREST RATE MANAGEMENT AGREEMENTS

36-82-250. Definitions.

As used in this article, the term:

1. "Counterparty" means the party entering into a qualified interest rate management agreement with the local governmental entity. A counterparty must be a bank, insurance company, or other financial institution duly qualified to do business in the state that either:
   1. Has, or whose obligations are guaranteed by an entity that has, at the time of entering into a qualified interest rate management agreement and for the entire term thereof, a long-term unsecured debt rating or financial strength rating in one of the top two ratings categories, without regard to any refinement or gradation of rating category by numerical modifier or otherwise, assigned by any two of the following: Moody's Investors Service, Inc., Standard & Poors Ratings Service, a division of The McGraw-Hill Companies, Inc., Fitch, Inc., or such other nationally recognized ratings service approved by the governing body of the local governmental entity; or
   2. Has collateralized its obligations under a qualified interest rate management agreement in a manner approved by the local governmental entity.
2. "Debt" shall include all debt and revenue obligations that a local governmental entity is authorized to incur by law, including without limitation general obligation debt in the form of bonds or other obligations, revenue bonds and other forms of revenue obligations, and all other debt or revenue undertakings, including, but not limited to, bonds, notes, warrants, certificates or other evidences of indebtedness, or other obligations for borrowed money issued or to be issued by any local governmental entity. "Debt" includes any financing lease or installment purchase contracts of any local public authorities.
3. "Independent financial adviser" means a person or entity experienced in the financial aspects and risks of qualified interest rate management agreements that is retained by the local governmental entity to render advice with respect to a qualified interest rate management agreement. The independent financial adviser may not be the counterparty or an affiliate or agent of the counterparty on a qualified interest rate management agreement with respect to which the independent financial adviser is advising the local governmental entity.
4. "Interest rate management plan" means a written plan prepared or reviewed by an independent financial adviser with respect to qualified interest rate management agreements of the local governmental entity, which plan has been approved by the governing body of the local governmental entity.
5. "Lease or installment purchase contract" means multiyear lease, purchase, installment purchase, or lease purchase contracts within the meaning of Code Sections 20-2-506 and 36-60-13 or substantially similar other or successor Code sections.
6. "Local governmental entity" means any governmental body as defined in paragraph (2) of Code Section 36-82-61, as amended; provided, however, that such term shall only include authorities which are local public authorities included in the definition thereof set forth in subparagraphs (C) and (D) of paragraph (2) of Code Section 36-82-61, as amended.
7. "Qualified interest rate management agreement" means an agreement, including a confirmation evidencing a transaction effected under a master agreement entered into by the local governmental entity in accordance with, and fulfilling the requirements of, Code Section 36-82-253, which agreement in the judgment of the local governmental entity is designed to manage interest rate risk or interest cost of the local governmental entity on any debt or lease or installment purchase contract the local governmental entity is authorized to incur, including, but not limited to, interest rate swaps or exchange agreements, interest rate caps, collars, corridors, ceiling, floor, and lock agreements, forward agreements, swaptions, warrants, and other interest rate agreements which, in the judgment of the local governmental entity, will assist the local governmental entity in managing its interest rate risk or interest cost.

(Code 1981, §36-82-250, enacted by Ga. L. 2005, p. 642, § 1/SB 227.)