Reset Rate. Provided no Event of Default shall have occurred and be continuing, at the written request of the Borrower and with the prior written consent of Xxxxxxx Mac and the Bank or, after Conversion, at the written request of the Credit Facility Provider on behalf of the Borrower if the Borrower has not provided the Credit Facility Provider proof satisfactory to it of the extension or substitution of a Hedge Agreement satisfying the requirements of the Reimbursement Agreement not later than sixty (60) days prior to the expiration of the Hedge Agreement, the rate of interest on the Bonds may be established at a Reset Rate on any Interest Payment Date during a Variable Period or on any Reset Adjustment Date, in accordance with the procedures set forth in this subsection (c). In order to effect establishment of a Reset Rate, the Borrower must deliver such written consent and a written request to the Trustee, the Issuer, the Credit Facility Provider, the Servicer (from and after the Conversion Date), the Tender Agent and the Remarketing Agent (or, if applicable, following the Conversion Date, the Credit Facility Provider on behalf of the Borrower must deliver such request) specifying (i) (if the Bonds then bear interest at a Variable Rate) the Reset Adjustment Date, which shall be not less than forty (40) days after notice is received by the parties, (ii) the sinking fund redemption amounts for each Interest Payment Date, as provided in Section 3.01(c), at a price equal to the principal amount of Bonds subject to redemption plus interest accrued thereon to the date fixed for redemption, without premium, pursuant to Section 3.01(b)(v) hereof and any applicable optional redemption provisions pursuant to Section 3.01(a) hereof, (iii) the proposed duration of the Reset Period, which shall be at least five (5) years (ten (10) years so long as the Credit Enhancement Agreement is the Credit Facility) or such shorter period as may be approved by the Credit Facility Provider and shall terminate on the Business Day before the last Interest Payment Date preceding (x) the “Termination Date” (as defined in the Credit Enhancement Agreement) if the Credit Enhancement Agreement is the Credit Facility, to be effective with respect to the Bonds during such Reset Period and (y) the expiration of the Credit Facility if the Credit Enhancement Agreement is not the Credit Facility to be effective with respect to the Bonds during such Reset Period, and (iv) the date on which the Reset Rate will be determined by the Remarketing Agent, which date shall be not later than the Business Day immediately prior to the Reset Adjustment Date. Such notice must be accompanied by (1) an opinion of Bond Counsel to the effect that the establishment of the Reset Rate for the Reset Period in accordance with the procedure described in this subsection (c) is permitted by this Indenture and the Act and will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds, (2) if Bonds are to be held publicly after the Reset Adjustment Date, either an irrevocable commitment (which commitment may be subject to customary commercial conditions) of an Alternate Credit Facility Provider to issue an Alternate Credit Facility, together with accompanying documentation required by Section 5.4 of the Financing Agreement or the irrevocable written commitment of the Credit Facility Provider for an amendment to the Credit Facility to fulfill the Interest Requirement and, if applicable, to extend the termination date of the Credit Facility, (3) the form of notice to be given by the Trustee to the owners of the Bonds with respect to the establishment of a Reset Rate, (4) payment to the Trustee and the Issuer of such amount as the Trustee and the Issuer, respectively, reasonably determines may be required in connection with the establishment of the Reset Rate, including, but not limited to, its own fees and expenses (including those of its counsel) and the cost of printing new Bonds, (5) the proposed form of disclosure document, if any, to be distributed in connection with the remarketing of the Bonds on the Reset Adjustment Date and an undertaking of the Borrower which satisfies any applicable requirements of Rule 15c2-12 of the Securities Exchange Act of 1934, and (6) unless otherwise consented to in writing by the Issuer in its sole and absolute discretion, either: (A) the repayment of the Bonds or the Bond Mortgage Loan from and after such Reset Adjustment Date will be secured by a credit enhancement provided by Xxxxxxx Mac in form and substance equivalent to the Credit Facility, or (B) written evidence from the Rating Agency to the effect that the Bonds will be rated at least “Aa2”/”P-1” by Moody’s or “AA”/”A-1” by S&P, without regard to pluses or minuses (or such lower ratings as shall be approved by the Issuer) on such Reset Adjustment Date. If (i) the Credit Facility to be in effect upon and after a Reset Adjustment Date or (ii) an irrevocable commitment as described in (2) above is not delivered to the Trustee in escrow at least fifteen (15) days before the applicable Reset Adjustment Date, or if on any Business Day at least fifteen (15) days before the applicable Reset Adjustment Date the Trustee receives notice from the Remarketing Agent that a Market Risk Event has occurred, the Trustee shall not give the notice specified in the next paragraph to the owners of the Bonds. In the event that the Trustee receives notice from the Remarketing Agent that a Market Risk Event has occurred after giving the notice specified in the next paragraph to the owners of the Bonds, the Trustee shall notify the owners of the Bonds that the Reset Adjustment Date has been cancelled. In such event, the Bonds shall (i) continue to bear interest at a Variable Rate if the Bonds then bear interest at a Variable Rate, or (ii) if the Bonds then bear interest at a Reset Rate, on the day following the Reset Period, the Bonds shall be redeemed or purchased in lieu thereof pursuant to Section 3.01(b)(vi) or 3.06 hereof, as applicable. The Trustee shall give notice to the owners of the Bonds, by first class mail not less than nine (9) days before the Reset Adjustment Date specifying: (i) the Reset Adjustment Date, and that the interest rate on the Bonds will be established at the Reset Rate on the Reset Adjustment Date; (ii) that all Bonds must be tendered for purchase at the Purchase Price and surrendered to the Tender Agent for purchase not later than 9:30 a.m., Washington, DC time, on the Reset Adjustment Date; and (iii) that the Reset Adjustment Date is subject to cancellation upon the Trustee’s receipt of notice from the Remarketing Agent that a Market Risk Event has occurred. Any Bond not tendered to the Tender Agent for purchase in accordance with the provisions of this subsection (c), on a Reset Adjustment Date (including a cancelled Reset Adjustment Date) shall be deemed to have been tendered for purchase on such Reset Adjustment Date pursuant to Section 10.01 hereof for all purposes of this Indenture, including particularly Article X hereof; provided, however, payment on such Bonds shall only be made upon presentation thereof. From and after each Reset Adjustment Date until the last day of the related Reset Period, the Bonds will bear interest at the applicable Reset Rate, payable on each Interest Payment Date of each year, commencing on the Interest Payment Date next following the Reset Adjustment Date, computed on the basis of a 360-day year of twelve 30-day months. The Reset Rate shall be that rate, determined by the Remarketing Agent on the date specified in the notice from the Borrower referred to in the first paragraph of this subsection (c), which, in the reasonable professional judgment of the Remarketing Agent, on the basis of prevailing financial market conditions, would be the interest rate necessary, but which would not exceed the interest rate necessary, to be borne by the Bonds in order for the market value of the Bonds on said date to be 100% of the principal amount thereof (disregarding accrued interest), provided that the Reset Rate on any Bond shall never exceed the Maximum Rate. The determination of a Reset Rate by the Remarketing Agent in accordance with the provisions of this subsection (c) shall (in the absence of manifest error) be conclusive and binding upon the Holders of the Bonds, the Issuer, the Credit Facility Provider, the Servicer (from and after the Conversion Date), the Remarketing Agent, the Borrower, the Tender Agent and the Trustee, and each shall be protected in relying on it. At least 40 and not more than 50 days prior to the final Interest Payment Date of a Reset Period, the Borrower shall elect to have the Bonds bear interest from and after such Interest Payment Date at a Reset Rate for a new Reset Period or at a Variable Rate or a Fixed Rate by giving written notice of such election to the Trustee, the Tender Agent, the Issuer, the Credit Facility Provider, the Servicer (from and after the Conversion Date) and the Remarketing Agent. If the Borrower elects to have the Bonds bear interest at a Variable Rate or fails to make such election, the Borrower shall be deemed to have elected to have the Bonds bear interest at a Variable Rate determined in accordance with the procedures set forth in subsection (b) of this Section commencing on the day immediately following the last day of the Reset Period, in which event there shall be no mandatory sinking fund redemption schedule for the Bonds during the succeeding Variable Period. Notwithstanding the election of the Borrower to have the Bonds bear interest at a new Reset Rate, a Fixed Rate or a Variable Rate as the case may be, at the end of a Reset Period or the deemed election of the Borrower to have the Bonds bear interest at a Variable Rate, if the Borrower fails to supply the items required by subsections (c) or (d), as applicable, of this Section 2.02, the Bonds shall be redeemed or purchased in lieu thereof on the day following such Reset Period pursuant to Section 3.01(b)(vi) or 3.06 hereof, as applicable.
Appears in 2 contracts
Samples: Trust Indenture, Trust Indenture
Reset Rate. Provided no Event of Default shall have occurred and be continuing, at the written request of the Borrower and with the prior written consent of Xxxxxxx Mac and the Bank or, after Conversion, at the written request of the Credit Facility Provider on behalf of the Borrower if the Borrower has not provided the Credit Facility Provider proof satisfactory to it of the extension or substitution of a Hedge Agreement satisfying the requirements of the Reimbursement Agreement not later than sixty (60) days prior to the expiration of the Hedge Agreement, the rate of interest on the Bonds may be established at a Reset Rate on any Interest Payment Date during a Variable Period or on any Reset Adjustment Date, in accordance with the procedures set forth in this subsection (c). In order to effect establishment of a Reset Rate, the Borrower must deliver such written consent and a written request to the Trustee, the Issuer, the Credit Facility Provider, the Servicer (from and after the Conversion Date), the Tender Agent and the Remarketing Agent (or, if applicable, following the Conversion Date, the Credit Facility Provider on behalf of the Borrower must deliver such request) specifying (i) (if the Bonds then bear interest at a Variable Rate) the Reset Adjustment Date, which shall be not less than forty (40) days after notice is received by the parties, (ii) the sinking fund redemption amounts for each Interest Payment Date, as provided in Section 3.01(c), at a price equal to the principal amount of Bonds subject to redemption plus interest accrued thereon to the date fixed for redemption, without premium, pursuant to Section 3.01(b)(v) hereof and any applicable optional redemption provisions pursuant to Section 3.01(a) hereof, (iii) the proposed duration of the Reset Period, which shall be at least five (5) years (ten (10) years so long as the Credit Enhancement Agreement is the Credit Facility) or such shorter period as may be approved by the Credit Facility Provider and shall terminate on the Business Day before the last Interest Payment Date preceding (x) the “Termination Date” (as defined in the Credit Enhancement Agreement) if the Credit Enhancement Agreement is the Credit Facility, to be effective with respect to the Bonds during such Reset Period and (y) the expiration of the Credit Facility if the Credit Enhancement Agreement is not the Credit Facility to be effective with respect to the Bonds during such Reset Period, and (iv) the date on which the Reset Rate will be determined by the Remarketing Agent, which date shall be not later than the Business Day immediately prior to the Reset Adjustment Date. Such notice must be accompanied by (1) an opinion of Bond Counsel to the effect that the establishment of the Reset Rate for the Reset Period in accordance with the procedure described in this subsection (c) is permitted by this Indenture and the Act and will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds, (2) if Bonds are to be held publicly after the Reset Adjustment Date, either an irrevocable commitment (which commitment may be subject to customary commercial conditions) of an Alternate Credit Facility Provider to issue an Alternate Credit Facility, together with accompanying documentation required by Section 5.4 of the Financing Agreement or the irrevocable written commitment of the Credit Facility Provider for an amendment to the Credit Facility to fulfill the Interest Requirement and, if applicable, to extend the termination date of the Credit Facility, (3) the form of notice to be given by the Trustee to the owners of the Bonds with respect to the establishment of a Reset Rate, (4) payment to the Trustee and the Issuer of such amount as the Trustee and the Issuer, respectively, reasonably determines may be required in connection with the establishment of the Reset Rate, including, but not limited to, its own fees and expenses (including those of its counsel) and the cost of printing new Bonds, (5) the proposed form of disclosure document, if any, to be distributed in connection with the remarketing of the Bonds on the Reset Adjustment Date and an undertaking of the Borrower which satisfies any applicable requirements of Rule 15c2-12 of the Securities Exchange Act of 1934, and (6) unless otherwise consented to in writing by the Issuer in its sole and absolute discretion, either: (A) the repayment of the Bonds or the Bond Mortgage Loan from and after such Reset Adjustment Date will be secured by a credit enhancement provided by Xxxxxxx Mac in form and substance equivalent to the Credit Facility, or (B) written evidence from the Rating Agency to the effect that the Bonds will be rated at least “Aa2”/”P-1” by Moody’s or “AA”/”A-1” by S&P, without regard to pluses or minuses (or such lower ratings as shall be approved by the Issuer) on such Reset Adjustment Date. If (i) the Credit Facility to be in effect upon and after a Reset Adjustment Date or (ii) an irrevocable commitment as described in (2) above is not delivered to the Trustee in escrow at least fifteen (15) days before the applicable Reset Adjustment Date, or if on any Business Day at least fifteen (15) days before the applicable Reset Adjustment Date the Trustee receives notice from the Remarketing Agent that a Market Risk Event has occurred, the Trustee shall not give the notice specified in the next paragraph to the owners of the Bonds. In the event that the Trustee receives notice from the Remarketing Agent that a Market Risk Event has occurred after giving the notice specified in the next paragraph to the owners of the Bonds, the Trustee shall notify the owners of the Bonds that the Reset Adjustment Date has been cancelled. In such event, the Bonds shall (i) continue to bear interest at a Variable Rate if the Bonds then bear interest at a Variable Rate, or (ii) if the Bonds then bear interest at a Reset Rate, on the day following During the Reset Period, the Bonds shall be redeemed or purchased in lieu thereof pursuant bear interest at the Reset Rate. Not less than thirty (30) days prior to Section 3.01(b)(vi) or 3.06 hereofthe Reset Date, as applicable. The the Trustee shall give provide notice by first-class mail, postage prepaid, to all Owners (with a copy to the owners of Issuer and the Bonds, by first class mail not less than nine (9Borrower) days before at their addresses shown on the Reset Adjustment Date specifying: (i) the Reset Adjustment Date, and Bond register notifying them that the interest rate on the Bonds will be established at converted to the Reset Rate effective on the Reset Date if the Trustee receives an Opinion of Bond Counsel to the effect that conversion of the interest rate on the Bonds to the Reset Rate on the Reset Adjustment Date; (ii) that all Date will not, in and of itself, cause interest on the Bonds must to be tendered includable in gross income for purchase at federal income tax purposes. Failure to mail any such notice or any defect in the Purchase Price and surrendered mailing thereof in respect of any Bond shall not affect the validity of the conversion of the interest rate with respect to any Bond. It is a condition to conversion of the interest rate on the Bonds to the Tender Agent for purchase not later than 9:30 a.m., Washington, DC time, Reset Rate on the Reset Adjustment Date; and (iii) Date that the Reset Adjustment Date is subject to cancellation upon Trustee and the Trustee’s receipt Servicer shall have received an Opinion of notice from the Remarketing Agent that a Market Risk Event has occurred. Any Bond not tendered Counsel to the Tender Agent for purchase in accordance with the provisions of this subsection (c), on a Reset Adjustment Date (including a cancelled Reset Adjustment Date) shall be deemed to have been tendered for purchase on such Reset Adjustment Date pursuant to Section 10.01 hereof for all purposes of this Indenture, including particularly Article X hereof; provided, however, payment on such Bonds shall only be made upon presentation thereof. From and after each Reset Adjustment Date until the last day effect that conversion of the related interest rate on the Bonds to the Reset Rate on the Reset Date will not, in and of itself, cause interest on the Bonds to be includable in gross income for federal income tax purposes. During the Reset Period, the Servicer shall determine a Reset Rate for the Bonds will bear interest at the applicable Reset Ratefor each day. The Servicer shall give telephonic or facsimile notice (with following written confirmation) on, payable on or promptly following, each Interest Payment Date to the Trustee and the Borrower of each year, commencing the interest payable on the such Interest Payment Date next following Date. Absent manifest error, the Reset Adjustment Date, computed on the basis of a 360-day year of twelve 30-day months. The Reset Rate shall be that rate, determined by the Remarketing Agent on the date specified in the notice from the Borrower referred to in the first paragraph of this subsection (c), which, in the reasonable professional judgment determination of the Remarketing Agent, on the basis of prevailing financial market conditions, would be the interest rate necessary, but which would not exceed the interest rate necessary, to be borne by the Bonds in order for the market value of the Bonds on said date to be 100% of the principal amount thereof (disregarding accrued interest), provided that the Reset Rate on any Bond shall never exceed the Maximum Rate. The determination of a Reset Rate by the Remarketing Agent in accordance with the provisions of this subsection (c) Servicer shall (in the absence of manifest error) be conclusive and binding upon the Holders of the BondsOwners, the Issuer, the Credit Facility Provider, the Servicer (from and after the Conversion Date), the Remarketing Agent, the Borrower, the Tender Agent Borrower and the Trustee, and each shall be protected in relying on it. At least 40 and not more than 50 days prior to the final Interest Payment Date of a Reset Period, the Borrower shall elect to have the Bonds bear interest from and after such Interest Payment Date at a Reset Rate for a new Reset Period or at a Variable Rate or a Fixed Rate by giving written notice of such election to the Trustee, the Tender Agent, the Issuer, the Credit Facility Provider, the Servicer (from and after the Conversion Date) and the Remarketing Agent. If the Borrower elects to have the Bonds bear interest at a Variable Rate or fails to make such election, the Borrower shall be deemed to have elected to have the Bonds bear interest at a Variable Rate determined in accordance with the procedures set forth in subsection (b) of this Section commencing on the day immediately following the last day of the Reset Period, in which event there shall be no mandatory sinking fund redemption schedule for the Bonds during the succeeding Variable Period. Notwithstanding the election of the Borrower to have the Bonds bear interest at a new Reset Rate, a Fixed Rate or a Variable Rate as the case may be, at the end of a Reset Period or the deemed election of the Borrower to have the Bonds bear interest at a Variable Rate, if the Borrower fails to supply the items required by subsections (c) or (d), as applicable, of this Section 2.02, the Bonds shall be redeemed or purchased in lieu thereof on the day following such Reset Period pursuant to Section 3.01(b)(vi) or 3.06 hereof, as applicable.
Appears in 1 contract
Samples: Trust Indenture
Reset Rate. Provided no Event of Default shall have occurred and be continuing, at the written request of the Borrower and with the prior written consent of Xxxxxxx Freddie Mac and the Bank or, after Conversion, at the written request of the Credit Facility Provider on behalf of the Borrower if the Borrower has not provided the Credit Facility Provider proof satisfactory to it of the extension or substitution of a Hedge Agreement satisfying the requirements of the Reimbursement Agreement not later than sixty (60) days prior to the expiration of the Hedge Agreement, the rate of interest on the Bonds may be established at a Reset Rate on any Interest Payment Date during a Variable Period or on any Reset Adjustment Date, in accordance with the procedures set forth in this subsection (c). In order to effect establishment of a Reset Rate, the Borrower must deliver such written consent and a written request to the Trustee, the Issuer, the Credit Facility Provider, the Servicer (from and after the Conversion Date), the Tender Agent and the Remarketing Agent (or, if applicable, following the Conversion Date, the Credit Facility Provider on behalf of the Borrower must deliver such request) specifying (i) (if the Bonds then bear interest at a Variable Rate) the Reset Adjustment Date, which shall be not less than forty (40) days after notice is received by the parties, (ii) the sinking fund redemption amounts for each Interest Payment Date, as provided in Section 3.01(c), at a price equal to the principal amount of Bonds subject to redemption plus interest accrued thereon to the date fixed for redemption, without premium, pursuant to Section 3.01(b)(v) hereof and any applicable optional redemption provisions pursuant to Section 3.01(a) hereof, (iii) the proposed duration of the Reset Period, which shall be at least five (5) years (ten (10) years so long as the Credit Enhancement Agreement is the Credit Facility) or such shorter period as may be approved by the Credit Facility Provider and shall terminate on the Business Day before the last Interest Payment Date preceding (x) the “Termination Date” (as defined in the Credit Enhancement Agreement) if the Credit Enhancement Agreement is the Credit Facility, to be effective with respect to the Bonds during such Reset Period and (y) the expiration of the Credit Facility if the Credit Enhancement Agreement is not the Credit Facility to be effective with respect to the Bonds during such Reset Period, and (iv) the date on which the Reset Rate will be determined by the Remarketing Agent, which date shall be not later than the Business Day immediately prior to the Reset Adjustment Date. Such notice must be accompanied by (1) an opinion of Bond Counsel to the effect that the establishment of the Reset Rate for the Reset Period in accordance with the procedure described in this subsection (c) is permitted by this Indenture and the Act and will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds, (2) if Bonds are to be held publicly after the Reset Adjustment Date, either an irrevocable commitment (which commitment may be subject to customary commercial conditions) of an Alternate Credit Facility Provider to issue an Alternate Credit Facility, together with accompanying documentation required by Section 5.4 of the Financing Agreement or the irrevocable written commitment of the Credit Facility Provider for an amendment to the Credit Facility to fulfill the Interest Requirement and, if applicable, to extend the termination date of the Credit Facility, (3) the form of notice to be given by the Trustee to the owners of the Bonds with respect to the establishment of a Reset Rate, (4) payment to the Trustee and the Issuer of such amount as the Trustee and the Issuer, respectively, reasonably determines may be required in connection with the establishment of the Reset Rate, including, but not limited to, its own fees and expenses (including those of its counsel) and the cost of printing new Bonds, (5) the proposed form of disclosure document, if any, to be distributed in connection with the remarketing of the Bonds on the Reset Adjustment Date and an undertaking of the Borrower which satisfies any applicable requirements of Rule 15c2-12 of the Securities Exchange Act of 1934, and (6) unless otherwise consented to in writing by the Issuer in its sole and absolute discretion, either: (A) the repayment of the Bonds or the Bond Mortgage Loan from and after such Reset Adjustment Date will be secured by a credit enhancement provided by Xxxxxxx Freddie Mac in form and substance equivalent to the Credit Facility, or (B) written evidence from the Rating Agency to the effect that the Bonds will be rated at least “Aa2”/”P-1” by Moody’s or “AA”/”A-1” by S&P, without regard to pluses or minuses (or such lower ratings as shall be approved by the Issuer) on such Reset Adjustment Date. If (i) the Credit Facility to be in effect upon and after a Reset Adjustment Date or (ii) an irrevocable commitment as described in (2) above is not delivered to the Trustee in escrow at least fifteen (15) days before the applicable Reset Adjustment Date, or if on any Business Day at least fifteen (15) days before the applicable Reset Adjustment Date the Trustee receives notice from the Remarketing Agent that a Market Risk Event has occurred, the Trustee shall not give the notice specified in the next paragraph to the owners of the Bonds. In the event that the Trustee receives notice from the Remarketing Agent that a Market Risk Event has occurred after giving the notice specified in the next paragraph to the owners of the Bonds, the Trustee shall notify the owners of the Bonds that the Reset Adjustment Date has been cancelled. In such event, the Bonds shall (i) continue to bear interest at a Variable Rate if the Bonds then bear interest at a Variable Rate, or (ii) if the Bonds then bear interest at a Reset Rate, on the day following the Reset Period, the Bonds shall be redeemed or purchased in lieu thereof pursuant to Section 3.01(b)(vi) or 3.06 hereof, as applicable. The Trustee shall give notice to the owners of the Bonds, by first class mail not less than nine (9) days before the Reset Adjustment Date specifying: (i) the Reset Adjustment Date, and that the interest rate on the Bonds will be established at the Reset Rate on the Reset Adjustment Date; (ii) that all Bonds must be tendered for purchase at the Purchase Price and surrendered to the Tender Agent for purchase not later than 9:30 a.m., Washington, DC time, on the Reset Adjustment Date; and (iii) that the Reset Adjustment Date is subject to cancellation upon the Trustee’s receipt of notice from the Remarketing Agent that a Market Risk Event has occurred. Any Bond not tendered to the Tender Agent for purchase in accordance with the provisions of this subsection (c), on a Reset Adjustment Date (including a cancelled Reset Adjustment Date) shall be deemed to have been tendered for purchase on such Reset Adjustment Date pursuant to Section 10.01 hereof for all purposes of this Indenture, including particularly Article X hereof; provided, however, payment on such Bonds shall only be made upon presentation thereof. From and after each Reset Adjustment Date until the last day of the related Reset Period, the Bonds will bear interest at the applicable Reset Rate, payable on each Interest Payment Date of each year, commencing on the Interest Payment Date next following the Reset Adjustment Date, computed on the basis of a 360-day year of twelve 30-day months. The Reset Rate shall be that rate, determined by the Remarketing Agent on the date specified in the notice from the Borrower referred to in the first paragraph of this subsection (c), which, in the reasonable professional judgment of the Remarketing Agent, on the basis of prevailing financial market conditions, would be the interest rate necessary, but which would not exceed the interest rate necessary, to be borne by the Bonds in order for the market value of the Bonds on said date to be 100% of the principal amount thereof (disregarding accrued interest), provided that the Reset Rate on any Bond shall never exceed the Maximum Rate. The determination of a Reset Rate by the Remarketing Agent in accordance with the provisions of this subsection (c) shall (in the absence of manifest error) be conclusive and binding upon the Holders of the Bonds, the Issuer, the Credit Facility Provider, the Servicer (from and after the Conversion Date), the Remarketing Agent, the Borrower, the Tender Agent and the Trustee, and each shall be protected in relying on it. At least 40 and not more than 50 days prior to the final Interest Payment Date of a Reset Period, the Borrower shall elect to have the Bonds bear interest from and after such Interest Payment Date at a Reset Rate for a new Reset Period or at a Variable Rate or a Fixed Rate by giving written notice of such election to the Trustee, the Tender Agent, the Issuer, the Credit Facility Provider, the Servicer (from and after the Conversion Date) and the Remarketing Agent. If the Borrower elects to have the Bonds bear interest at a Variable Rate or fails to make such election, the Borrower shall be deemed to have elected to have the Bonds bear interest at a Variable Rate determined in accordance with the procedures set forth in subsection (b) of this Section commencing on the day immediately following the last day of the Reset Period, in which event there shall be no mandatory sinking fund redemption schedule for the Bonds during the succeeding Variable Period. Notwithstanding the election of the Borrower to have the Bonds bear interest at a new Reset Rate, a Fixed Rate or a Variable Rate as the case may be, at the end of a Reset Period or the deemed election of the Borrower to have the Bonds bear interest at a Variable Rate, if the Borrower fails to supply the items required by subsections (c) or (d), as applicable, of this Section 2.02, the Bonds shall be redeemed or purchased in lieu thereof on the day following such Reset Period pursuant to Section 3.01(b)(vi) or 3.06 hereof, as applicable.
Appears in 1 contract
Samples: Trust Indenture
Reset Rate. Provided no Event of Default shall have occurred and be continuing, at At the written request of the Borrower and with the prior written consent of Xxxxxxx Mac and the Bank or, after Conversion, Credit Facility Provider or at the written request of the Credit Facility Provider on behalf of the Borrower if the Borrower has not provided the Credit Facility Provider proof satisfactory to it of the extension or substitution of a Hedge Agreement satisfying the requirements of the Reimbursement Agreement not later than sixty (60) days prior to the expiration of the any Hedge Agreement, the rate of interest on the Bonds may be established at a Reset Rate on any Interest Payment Date during a Variable Period or on any Reset Adjustment Date, in accordance with the procedures set forth in this subsection (cSection 2.02(c). In order to effect establishment of a Reset Rate, the Borrower must deliver such written request (and consent and a of the Credit Facility Provider), or, if applicable, the Credit Facility Provider on behalf of the Borrower must deliver such written request request, to the Trustee, the Issuer, the Credit Facility Provider, the Servicer (from and after the Conversion Date)Servicer, the Tender Agent and the Remarketing Agent (or, if applicable, following the Conversion Date, the Credit Facility Provider on behalf of the Borrower must deliver such request) specifying (i) (if the Bonds then bear interest at a Variable Rate) the Reset Adjustment Date, which shall be not less than forty (40) days after notice is received by the parties, (ii) the any sinking fund redemption amounts for each Interest Payment Date, as provided in Section 3.01(c), at a price equal to the principal amount of Bonds subject to redemption plus interest accrued thereon to the date fixed for redemption, without premium, pursuant to Section 3.01(b)(v) hereof and any applicable optional redemption provisions pursuant to Section 3.01(a) hereof, (iii) the proposed duration of the Reset Period, which shall be at least five (5) years (ten (10) years so long as the Credit Enhancement Agreement is the Credit Facility) or such shorter period as may be approved consented to in writing by the Credit Facility Provider Provider, and shall terminate on not later than the Business Day before the last Interest Payment Date preceding the (xA) the “Termination Date” (as defined in the Credit Enhancement Agreement) if the Credit Enhancement Agreement is the Credit Facility, Facility to be effective with respect to the Bonds during such Reset Period and (yB) the expiration of the Credit Facility if the Credit Enhancement Agreement is not the Credit Facility to be effective with respect to the Bonds during such Reset Period, and (iv) the date on which the Reset Rate will be determined by the Remarketing Agent, which date shall be not later than the Business Day immediately prior to the Reset Adjustment Date. Such Except as noted in the paragraph immediately below, the Trustee shall give notice must to the Owners of the Bonds of the Reset Adjustment Date by first class mail not less than nine (9) days before the Reset Adjustment Date, provided that not less than five (5) Business Days prior to the Trustee giving such notice the Borrower shall have delivered or caused to be accompanied by delivered to the Trustee (1) an opinion of Bond Counsel to the effect that the establishment of the Reset Rate for the Reset Period in accordance with the procedure described in this subsection (cSection 2.02(c) is permitted by this Indenture and the Act and will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes of interest on the Bondspurposes, (2) if Bonds are to be held publicly after the Reset Adjustment Date, either an irrevocable commitment (which commitment may be subject to customary commercial conditions) of an Alternate Credit Facility Provider to issue an Alternate Credit FacilityFacility to be in effect upon and after the Reset Adjustment Date, together with accompanying documentation required by Section 5.4 of the Financing Agreement or the irrevocable written commitment of the Credit Facility Provider for an amendment to the Credit Facility to fulfill the Interest Requirement and, if applicable, to extend the termination date of the Credit Facility, (3) the form of notice to be given by the Trustee to the owners of the Bonds Bondholders with respect to the establishment of a Reset Rate, (4) payment to the Trustee and the Issuer of such amount as the Trustee and the Issuer, respectively, reasonably determines may be required in connection with the establishment of the Reset Rate, including, but not limited to, its own fees and expenses (including those of its counsel) and the cost of printing new Bonds, (5) the proposed Rate(which form of disclosure document, if any, to be distributed in connection with the remarketing of the Bonds on the Reset Adjustment Date and an undertaking of the Borrower which satisfies any applicable requirements of Rule 15c2-12 of the Securities Exchange Act of 1934, and (6) unless otherwise consented to in writing by the Issuer in its sole and absolute discretion, either: (A) the repayment of the Bonds or the Bond Mortgage Loan from and after such Reset Adjustment Date will be secured by a credit enhancement provided by Xxxxxxx Mac in form and substance equivalent to the Credit Facility, or (B) written evidence from the Rating Agency to the effect that the Bonds will be rated at least “Aa2”/”P-1” by Moody’s or “AA”/”A-1” by S&P, without regard to pluses or minuses (or such lower ratings as shall be approved by the Issuer) on such Reset Adjustment Date. If (i) the Credit Facility to be in effect upon and after a Reset Adjustment Date or (ii) an irrevocable commitment as described in (2) above is not delivered to the Trustee in escrow at least fifteen (15) days before the applicable Reset Adjustment Date, or if on any Business Day at least fifteen (15) days before the applicable Reset Adjustment Date the Trustee receives notice from the Remarketing Agent that a Market Risk Event has occurred, the Trustee shall not give the notice specified in the next paragraph to the owners of the Bonds. In the event that the Trustee receives notice from the Remarketing Agent that a Market Risk Event has occurred after giving the notice specified in the next paragraph to the owners of the Bonds, the Trustee shall notify the owners of the Bonds that the Reset Adjustment Date has been cancelled. In such event, the Bonds shall (i) continue to bear interest at a Variable Rate if the Bonds then bear interest at a Variable Rate, or (ii) if the Bonds then bear interest at a Reset Rate, on the day following the Reset Period, the Bonds shall be redeemed or purchased in lieu thereof pursuant to Section 3.01(b)(vi) or 3.06 hereof, as applicable. The Trustee shall give notice to the owners of the Bonds, by first class mail not less than nine (9) days before the Reset Adjustment Date specifying: include (i) the Reset Adjustment Date, and (ii) that the interest rate on the Bonds will be established at the Reset Rate on the Reset Adjustment Date; (iiiii) that all Bonds must be tendered for purchase at the Purchase Price and surrendered to the Tender Agent for purchase not later than 9:30 a.m., Washington, DC D.C. time, on the Reset Adjustment Date; and (iiiiv) that the Reset Rate Adjustment Date (but not the mandatory tender of Bonds on the proposed Reset Rate Adjustment Date) is subject to cancellation upon receipt by the Trustee’s receipt Trustee of notice from the Remarketing Agent that a Market Risk Event has occurred. Any Bond not tendered to the Tender Agent for purchase in accordance with the provisions of this subsection (c), on a Reset Adjustment Date (including a cancelled Reset Adjustment Date) shall be deemed to have been tendered for purchase on such Reset Adjustment Date pursuant to Section 10.01 hereof for all purposes of this Indenture, including particularly Article X hereof; provided, however, payment on such Bonds shall only be made upon presentation thereof. From and after each Reset Adjustment Date until the last day of the related Reset Period, the Bonds will bear interest at the applicable Reset Rate, payable on each Interest Payment Date of each year, commencing on the Interest Payment Date next following the Reset Adjustment Date, computed on the basis of a 360-day year of twelve 30-day months. The Reset Rate shall be that rate, determined by the Remarketing Agent on the date specified in the notice from the Borrower referred to in the first paragraph of this subsection (c), which, in the reasonable professional judgment of the Remarketing Agent, on the basis of prevailing financial market conditions, would be the interest rate necessary, but which would not exceed the interest rate necessary, to be borne by the Bonds in order for the market value of the Bonds on said date to be 100% of the principal amount thereof (disregarding accrued interest), provided that the Reset Rate on any Bond shall never exceed the Maximum Rate. The determination of a Reset Rate by the Remarketing Agent in accordance with the provisions of this subsection (c) shall (in the absence of manifest error) be conclusive and binding upon the Holders of the Bonds, the Issuer, the Credit Facility Provider, the Servicer (from and after the Conversion Date), the Remarketing Agent, the Borrower, the Tender Agent and the Trustee, and each shall be protected in relying on it. At least 40 and not more than 50 days prior to the final Interest Payment Date of a Reset Period, the Borrower shall elect to have the Bonds bear interest from and after such Interest Payment Date at a Reset Rate for a new Reset Period or at a Variable Rate or a Fixed Rate by giving written notice of such election to the Trustee, the Tender Agent, the Issuer, the Credit Facility Provider, the Servicer (from and after the Conversion Date) and the Remarketing Agent. If the Borrower elects to have the Bonds bear interest at a Variable Rate or fails to make such election, the Borrower shall be deemed to have elected to have the Bonds bear interest at a Variable Rate determined in accordance with the procedures set forth in subsection (b) of this Section commencing on the day immediately following the last day of the Reset Period, in which event there shall be no mandatory sinking fund redemption schedule for the Bonds during the succeeding Variable Period. Notwithstanding the election of the Borrower to have the Bonds bear interest at a new Reset Rate, a Fixed Rate or a Variable Rate as the case may be, at the end of a Reset Period or the deemed election of the Borrower to have the Bonds bear interest at a Variable Rate, if the Borrower fails to supply the items required by subsections (c) or (d), as applicable, of this Section 2.02, the Bonds shall be redeemed or purchased in lieu thereof on the day following such Reset Period pursuant to Section 3.01(b)(vi) or 3.06 hereof, as applicable.,
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Samples: Trust Indenture
