Qualified Hedge Agreements Clause Samples
A Qualified Hedge Agreements clause defines the criteria and requirements for certain hedging contracts to be recognized as 'qualified' under the terms of an agreement. Typically, this involves specifying that the hedge must be entered into for legitimate risk management purposes, such as mitigating interest rate or currency fluctuations, and must meet certain regulatory or contractual standards. By clearly outlining what constitutes a qualified hedge, this clause ensures that only appropriate and compliant hedging activities receive the intended legal and financial protections, thereby reducing ambiguity and potential disputes over the treatment of such agreements.
Qualified Hedge Agreements. (A) The Trust may from time to time enter into Qualified Hedge Agreements with a Hedge Provider with respect to all or a portion of the Bonds of any Series Outstanding hereunder. Prior to the effective date of any Qualified Hedge Agreement, the Trust shall deliver to the Master Trustee the following:
(1) A fully executed copy of the Qualified Hedge Agreement, together with a certificate of an Authorized Officer stating that such agreement and the Hedge Provider meet the requirements of a Qualified Hedge Agreement and Hedge Provider hereunder; and
(2) A certificate of an Authorized Officer designating the Series of Senior Bonds or Subordinate Bonds or portions thereof subject to the Qualified Hedge Agreement.
(B) To the extent provided in a Supplemental Trust Agreement, the obligations of the Trust under a Qualified Hedge Agreement (herein referred to as a “Parity Hedge Agreement”) to make all or any portion of the Scheduled Hedge Payments required to be made by the Trust thereunder may be secured by a pledge of the Trust Estate on a parity with the pledge thereof created hereunder for the benefit of the Owners of the related Series of Senior Bonds or Subordinate Bonds. Except as otherwise provided in the applicable Supplemental Trust Agreement, if such Parity Hedge Agreement is entered into with respect to Senior Bonds, all Scheduled Hedge Payments to be made by the Trust under any Parity Hedge Agreement shall be payable from amounts deposited in the Senior Debt Service Fund as provided in Section 5.6 hereof on a parity with all other payments therefrom with respect to the Senior Bonds or, if the Parity Hedge Agreement is entered into with respect to Subordinate Bonds, the Subordinate Debt Service Fund as provided in Section 5.6(E) hereof on a parity with all other payments therefrom with respect to the Subordinate Bonds. The obligations of the Trust to make all or any portion of any Termination Hedge Payments under any Parity Hedge Agreement, and the obligation of the Trust to make any Qualified Hedge Payments under any other Qualified Hedge Agreement, may be secured by a pledge of the Trust Estate, provided that such pledge shall in all respects be subordinate to the pledge created hereby for the benefit of the related Senior Bonds or Subordinate Bonds Outstanding hereunder.
(C) Upon the issuance of any Variable Rate Bonds hereunder which are subject to a Fixed Rate Hedge Agreement, an Authorized Officer shall deliver to the Master Trustee a certificate ...
Qualified Hedge Agreements. (A) The Authority may, to the extent permitted by law, enter into one or more Qualified Hedge Agreements concurrently with or at any time after the issuance of the Bonds hereunder.
(B) Before effecting any transaction under a Qualified Hedge Agreement, there shall be provided to the Trustee an opinion of Bond Counsel that the Authority’s execution, delivery and performance of the Qualified Hedge Agreement will not, in and of themselves cause the interest on such Bonds not to be excludable from gross income for federal income tax purposes.
(C) Unless the counterparty to any Qualified Hedge Agreement shall agree that hedge payments with respect thereto shall be subordinate to payments on the Bonds or shall be unsecured, (i) the Authority shall by Supplemental Trust Agreement prior to the effective date of such Qualified Hedge Agreement cause the Qualified Hedge Receipts thereunder to be pledged as part of the trust estate securing the Bonds and (ii) Qualified Hedge Payments under such Qualified Hedge Agreement shall be on parity with interest payments on the Bonds, all in the manner and to the extent specified in Section 5.02(B). Qualified Hedge Payments under any Qualified Hedge Agreement shall only be paid in the manner and to the extent specified in Section 5.02(B). Neither Qualified Hedge Payments nor other payments due under any Qualified Hedge Agreement shall be secured by funds on deposit in the Operation and Maintenance Fund or funds on deposit in the Construction Fund.
Qualified Hedge Agreements. Seller shall enter into and maintain one or more Qualified Hedge Agreements to hedge the portfolio of Purchased Assets in a manner satisfactory to Agent and Seller in form and substance and shall observe and perform all covenants and agreements under such Qualified Hedge Agreements. With respect to any Mortgage Loan that is not a HELOC, Seller shall enter into and maintain at all times during the term of this Agreement as long as Purchased Assets exist in the Facility, one or more Qualified Hedge Agreements in a manner sufficient to maintain the Excess Pricing Rate for such Mortgage Loan at the Required Excess Pricing Rate. With respect to any Mortgage Loan that is a HELOC, if the Excess Pricing Rate for such Mortgage Loan declines below 75 basis points (0.75%) per annum, Seller shall enter into and maintain one or more Qualified Hedge Agreements in a manner sufficient to maintain the Excess Pricing Rate for such Mortgage Loan at the Required Excess Pricing Rate. Any payments to be made by a Qualified Hedge Counterparty under a Qualified Hedge Agreement shall be required to be made directly to Custodian for deposit in the Collection Account; if any payment is nevertheless made by a Qualified Hedge Counterparty under a Qualified Hedge Agreement to Seller, Seller shall remit such payment to Custodian for deposit into the Collection Account within one Business Day of receipt of such payment; any payments required to be made to a Qualified Hedge Counterparty under a Qualified Hedge Agreement shall be made by Seller.