Illinois Compiled Statutes
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70 ILCS 3615/4.14
(70 ILCS 3615/4.14)
(from Ch. 111 2/3, par. 704.14)
Rate Protection Contract.
"Rate Protection Contract" means
interest rate price exchange agreements; currency exchange agreements;
forward payment conversion agreements; contracts providing for payment or
receipt of funds based on levels of, or changes in, interest rates,
currency exchange rates, stock or other indices; contracts to exchange cash
flows or a series of payments; contracts, including without limitation,
interest rate caps; interest rate floor; interest rate locks; interest rate
collars; rate of return guarantees or assurances, to manage payment,
currency, rate, spread or similar exposure; the obligation, right, or
option to issue, put, lend, sell, grant a security interest in, buy, borrow
or otherwise acquire, a bond, note or other security or interest therein as
an investment, as collateral, as a hedge, or otherwise as a source or
assurance of payment to or by the Authority or as a reduction of the
Authority's or an obligor's risk exposure; repurchase agreements;
securities lending agreements; and other agreements or arrangements similar
to the foregoing.
Notwithstanding any provision in Section 2.20 (a) (ii) of this Act to the
contrary, in connection with or incidental to the issuance by the Authority
of its bonds or notes under the provisions of Section 4.04 or the exercise
of its powers under subsection (b) of Section 2.20, the Authority, for its
own benefit or for the benefit of the holders
of its obligations or their trustee, may enter into rate protection
contracts. The Authority may enter into rate protection contracts only
pursuant to a determination by a vote of 12
of the then Directors that the
terms of the contracts and any related agreements reduce the risk of loss
to the Authority, or protect, preserve or enhance the value of its assets,
or provide compensation to the Authority for losses resulting from changes
in interest rates. The Authority's obligations
under any rate protection contract or credit enhancement or liquidity
agreement shall not be considered bonds or notes for purposes of this Act.
For purposes of this Section a rate protection contract is a contract
determined by the Authority as necessary or appropriate to permit it to
manage payment, currency or interest rate risks or levels.
(Source: P.A. 95-708, eff. 1-18-08.)