CHAPTER 4. ISSUANCE OF OBLIGATIONS
IC 5-1.5-4
Chapter 4. Issuance of Obligations
IC 5-1.5-4-1
Purposes; bonds to be general obligations of bank payable out ofrevenues or funds of bank; limitation on amount outstanding;exception to limitation
Sec. 1. (a) The bank may issue its bonds or notes in principalamounts that it considers necessary to provide funds for any purposesunder this article, including:
(1) the purchase or acquisition of securities;
(2) the making of loans to or agreements with qualified entitiesthrough the purchase of securities;
(3) the payment, funding, or refunding of the principal of, orinterest or redemption premiums on, bonds or notes issued byit whether the bonds or notes or interest to be paid, funded, orrefunded have or have not become due;
(4) the establishment or increase of reserves to secure or to paybonds or notes or interest on bonds or notes and all other costsor expenses of the bank incident to and necessary or convenientto carry out its corporate purposes and powers; and
(5) the acquisition of school buses to be leased or sold to schoolcorporations (as defined in IC 36-1-2-17).
(b) Except as otherwise provided in this article or by the board,every issue of bonds or notes shall be general obligations of the bankpayable out of the revenues or funds of the bank, subject only toagreements with the holders of a particular series of bonds or notespledging a particular revenue or fund. Bonds or notes may beadditionally secured by a pledge of a grant or contributions from theUnited States, a qualified entity, or a person or a pledge of income orrevenues, funds, or money of the bank from any source.
(c) Notwithstanding subsections (a) and (b), the total amount ofbank bonds and notes outstanding at any one (1) time, except:
(1) bonds or notes issued to fund or refund bonds or notes; and
(2) bonds or notes issued for the purpose of purchasing anagreement executed by a qualified entity under IC 20-49-4;
may not exceed one billion dollars ($1,000,000,000) for qualifiedentities described in IC 5-1.5-1-8(1) through IC 5-1.5-1-8(4),IC 5-1.5-1-8(8) through IC 5-1.5-1-8(11), and IC 5-1.5-1-8(14).
(d) Notwithstanding subsections (a) and (b), the total amount ofbank bonds and notes outstanding at any one (1) time, except bondsor notes issued to fund or refund bonds or notes, may not exceed twohundred million dollars ($200,000,000) for qualified entitiesdescribed in IC 5-1.5-1-8(5) through IC 5-1.5-1-8(6).
(e) Notwithstanding subsections (a) and (b), the total amount ofbank bonds and notes outstanding at any one (1) time, except bondsor notes issued to fund or refund bonds or notes, may not exceedthirty million dollars ($30,000,000) for qualified entities describedin IC 5-1.5-1-8(7).
(f) The limitations contained in subsections (c), (d), and (e) do not
apply to bonds, notes, or other obligations of the bank if:
(1) the bonds, notes, or other obligations are not secured by areserve fund under IC 5-1.5-5; or
(2) funds and investments, and the anticipated earned intereston those funds and investments, are irrevocably set aside inamounts sufficient to pay the principal, interest, and premiumon the bonds, notes, or obligations at their respective maturitiesor on the date or dates fixed for redemption.
As added by P.L.25-1984, SEC.1. Amended by P.L.43-1985, SEC.12;P.L.30-1986, SEC.2; P.L.46-1987, SEC.10; P.L.37-1991, SEC.2;P.L.29-1992, SEC.2; P.L.28-1992, SEC.2; P.L.1-1993, SEC.22;P.L.132-1999, SEC.2; P.L.192-2006, SEC.1; P.L.2-2006, SEC.10;P.L.1-2007, SEC.21; P.L.232-2007, SEC.2.
IC 5-1.5-4-2
Nature of bond or note; state pledge and agreement
Sec. 2. (a) A bond or note of the bank:
(1) is not a debt, liability, loan of the credit, or pledge of thefaith and credit of the state or of any qualified entity;
(2) is payable solely from the money pledged or available for itspayment under this article, unless funded or refunded by bondsor notes of the bank; and
(3) must contain on its face a statement that the bank isobligated to pay principal and interest, and redemptionpremiums if any, and that the faith, credit, and taxing power ofthe state are not pledged to the payment of the bond or note.
(b) The state pledges to and agrees with the holders of the bondsor notes issued under this article that the state will not:
(1) limit or restrict the rights vested in the bank to fulfill theterms of any agreement made with the holders of its bonds ornotes; or
(2) in any way impair the rights or remedies of the holders ofthe bonds or notes;
until the bonds or notes, together with the interest on the bonds ornotes, and interest on unpaid installments of interest, and all costsand expenses in connection with an action or proceeding by or onbehalf of the holders, are fully met, paid, and discharged.
As added by P.L.25-1984, SEC.1. Amended by P.L.43-1985, SEC.13;P.L.46-1987, SEC.11.
IC 5-1.5-4-3
Negotiability of bonds and notes
Sec. 3. The bonds and notes of the bank are negotiableinstruments for all purposes of the Uniform Commercial Code,IC 26-1, subject only to the provisions of the bonds and notes forregistration.
As added by P.L.25-1984, SEC.1.
IC 5-1.5-4-4
Issuance; resolution; consent, proceedings, or conditions; rates of
interest; redemption; prior approval
Sec. 4. (a) Bonds or notes of the bank must be authorized byresolution of the board, may be issued in one (1) or more series, andmust:
(1) bear the date;
(2) mature at the time or times;
(3) be in the denomination;
(4) be in the form;
(5) carry the conversion or registration privileges;
(6) have the rank or priority;
(7) be executed in the manner;
(8) be payable from the sources in the medium of payment atthe place inside or outside the state; and
(9) be subject to the terms of redemption;
as the resolution of the board or the trust agreement securing thebonds or notes provides.
(b) Except as provided in subsection (e), bonds or notes may beissued under this article without obtaining the consent of any agencyof the state and without any other proceeding or condition other thanthe proceedings or conditions specified in this article.
(c) The rate or rates of interest on the bonds or notes may be fixedor variable. Variable rates shall be determined in the manner and inaccordance with the procedures set forth in the resolution authorizingthe issuance of the bonds or notes. Bonds or notes bearing a variablerate of interest may be converted to bonds or notes bearing a fixedrate or rates of interest, and bonds or notes bearing a fixed rate orrates of interest may be converted to bonds or notes bearing avariable rate of interest, to the extent and in the manner set forth inthe resolution pursuant to which the bonds or notes are issued. Theinterest on bonds or notes may be payable semiannually or annuallyor at any other interval or intervals as may be provided in theresolution, or the interest may be compounded and paid at maturityor at any other times as may be specified in the resolution.
(d) The bonds or notes may be made subject, at the option of theholders, to mandatory redemption by the bank at the times and underthe circumstances set forth in the authorizing resolution.
(e) The bank may not issue bonds for qualified entities describedin IC 5-1.5-1-8(5) through IC 5-1.5-1-8(7) or IC 5-1.5-1-8(11) thatare subject to the volume cap (as defined in IC 4-4-11.5-14) withoutobtaining the prior approval of the Indiana finance authority.
As added by P.L.25-1984, SEC.1. Amended by P.L.43-1985, SEC.14;P.L.46-1987, SEC.12; P.L.37-1991, SEC.3; P.L.10-1996, SEC.16;P.L.132-1999, SEC.3; P.L.235-2005, SEC.76.
IC 5-1.5-4-5
Resolution authorizing issuance; adoption; publication of notice;action to set aside resolution
Sec. 5. (a) Upon the adoption of a resolution authorizing theissuance of bonds or notes, the bank may publish notice of theadoption once each week for two (2) weeks in two (2) newspapers
published and of general circulation in the city of Indianapolis.
(b) If notice is published as provided in subsection (a), any actionor proceeding in any court to set aside the resolution authorizing theissuance of bonds or notes of the bank under this article or to obtainany relief upon the ground that the resolution is invalid must be filedwithin thirty (30) days following the first publication of notice of theadoption of the resolution. After the expiration of this thirty (30) dayperiod, no right of action shall be asserted nor shall the validity ofthe resolution or any of its provisions be open to question in anycourt or agency upon any grounds whatsoever.
As added by P.L.25-1984, SEC.1.
IC 5-1.5-4-6
Public or private sale; notice
Sec. 6. Bonds or notes of the bank may be sold at public or privatesale at the price the board determines. If bonds or notes of the bankare to be sold at public sale, the bank shall follow the provisions ofIC 5-1-11 and shall publish notice of the sale in accordance withIC 5-3-1-2 in two (2) newspapers published and of generalcirculation in the city of Indianapolis.
As added by P.L.25-1984, SEC.1. Amended by P.L.43-1985, SEC.15.
IC 5-1.5-4-7
Issuance of notes; payment of principal or interest thereon;funding or refunding
Sec. 7. The bank may from time to time issue its notes under thisarticle and pay and retire the principal of the notes or pay the interestdue thereon or fund or refund the notes from proceeds of bonds or ofother notes, or from other funds or money of the bank available forthat purpose in accordance with a contract between the bank and theholders of the notes.
As added by P.L.25-1984, SEC.1.
IC 5-1.5-4-8
Trust agreement or resolution; provisions; expenses
Sec. 8. (a) In the discretion of the board, any bonds or notesissued under this chapter may be secured by a trust agreement by andbetween the board and a corporate trustee, which may be any trustcompany or bank having the powers of a trust company within oroutside the state.
(b) The trust agreement or the resolution providing for theissuance of the bonds or notes may contain provisions for protectingand enforcing the rights and remedies of the holders of any suchbonds or notes as may be reasonable and proper and not in violationof law.
(c) The trust agreement or resolution may set forth the rights andremedies of the holders of any bonds or notes and of the trustee andmay restrict the individual right of action by the holders.
(d) In addition to the provisions of subsections (a), (b), and (c),any trust agreement or resolution may contain such other provisions
as the board may deem reasonable and proper for the security of theholders of any bonds or notes.
(e) All expenses incurred in carrying out the provisions of thetrust agreement or resolution may be paid from revenues or assetspledged or assigned to the payment of the principal of and theinterest on bonds and notes or from any other funds available to theboard.
As added by P.L.25-1984, SEC.1.
IC 5-1.5-4-9
Purchase of bonds or notes of bank; disposition; bonds or notesheld considered held for resale or transfer
Sec. 9. The bank may purchase bonds or notes of the bank out ofits funds or money available for the purchase of its own bonds andnotes. The bank may hold, cancel, or resell the bonds or notes subjectto, and in accordance with, agreements with holders of its bonds ornotes. Unless cancelled, bonds or notes so held shall be deemed to beheld for resale or transfer and the obligation evidenced by the bondsor notes shall not be deemed to be extinguished.
As added by P.L.25-1984, SEC.1. Amended by P.L.43-1985, SEC.16.
IC 5-1.5-4-10
Purchase of securities; documentation
Sec. 10. Subject to IC 5-1.5-8-2, all securities purchased, held, orowned by the bank, upon delivery to the bank, must be accompaniedby all documentation required by the board.
As added by P.L.25-1984, SEC.1. Amended by P.L.43-1985, SEC.17.