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SECTION 203. Determination of Adjustable Interest Rate.
 
 
 
 
 
 
 
 
 
 
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SECTION 203. Determination of Adjustable Interest Rate.

(a) For the period ending November 30, 1987, the 2010 Bonds shall bear interest at the rate of seven and fifty hundredths percent (7.50%) per annum. Thereafter, for each Rate Period prior to the Fixed Rate Date, the interest rate on the 2010 Bonds shall be a rate per annum equal to the Adjustable Interest Rate, which shall be determined as hereinafter provided. For the period ending November 30, 1988, the 2014 Bonds shall bear interest at the rate of seven and seventy-five hundredths percent (7.75%) per annum. Thereafter, for each Rate Period prior to the Fixed Rate Date, the interest rate on the 2014 Bonds shall be a rate per annum equal to the Adjustable Interest Rate, which shall be determined as hereinafter provided. For the period ending November 30, 1989, the 2018 Bonds shall bear interest at the rate of eight percent (8.00%) per annum. Thereafter, for each Rate Period prior to the Fixed Rate Date, the interest rate on the 2018 Bonds shall be at a rate per annum equal to the Adjustable Interest Rate, which shall be determined as hereinafter provided.


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(b) Prior to establishing the Adjustable Interest Rate, a Preliminary Adjustable Interest Rate shall be determined. The Preliminary Adjustable Interest Rate for each Rate Period will be a rate determined by the Remarketing Agent on the Business Day next preceding November 1 in each year (the "Determination Date"), commencing in the year 1987, prior to the Fixed Rate Date to be that rate which, in the judgment of the Remarketing Agent based on prevailing market rates, such judgment to be exercised in its sole discretion, is the minimum rate necessary for the Remarketing Agent to sell all of the Bonds which may be delivered to the Paying Agent for purchase pursuant to Section 206(a) (i) hereof or deemed to have been tendered for purchase pursuant to Sections 206(a)(ii), 402 and 801 hereof at par at 10:00 A.M., New York time, on the first day of such Rate Period.

Prior to Noon, New York time, on each Determination Date the Remarketing Agent shall notify the Paying Agent and the University of the Preliminary Adjustable Interest Rate for the next succeeding Rate Period by telephone or other telecommunications device and shall confirm such notice in writing as soon as practicable thereafter. The Paying Agent shall then notify the State Treasurer of such Preliminary Adjustable Interest Rate prior to 5:00 P.M., New York time, on each Determination Date. Notice of such Preliminary Adjustable Interest Rate shall be mailed by first-class mail by the Paying Agent to each Holder at his address as shown on the registration books on or before the second Business Day following such Determination Date. Such notice shall state (i) that the interest rate on the Bonds will be adjusted as of the next succeeding December 1 as provided in the Resolution, but shall in no event be lower than the Preliminary Adjustable Interest Rate and (ii) the Preliminary Adjustable Interest Rate.

The Adjustable Interest Rate effective for each Rate Period prior to the Fixed Rate Date shall be a rate established by the Remarketing Agent on the third Business Day next preceding the first day of such Rate Period and shall be determined as herein-after described. If no Bonds shall have been properly delivered to the Paying Agent or deemed to have been tendered for purchase on the first day of such Rate Period, the Adjustable Interest Rate for such Rate Period will be a rate per annum equal to the Preliminary Adjustable Interest Rate determined for such Rate Period. If any Bonds shall have been properly delivered to the Paying Agent or deemed to have been tendered for purchase on the first day of such Rate Period, the Adjustable Interest Rate for such Rate Period will be a rate determined by the Remarketing Agent to be that rate which, in the judgment of the Remarketing Agent based on prevailing market rates, such judgment to be exercised in its sole discretion, is the minimum rate necessary for the Remarketing Agent to sell all of the Bonds so delivered or


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deemed to have been tendered at par at 10:00 A.M., New York time, on the first day of such Rate Period.

On the Business Day following the determination of the Adjustable Interest Rate for the next succeeding Rate Period the Remarketing Agent shall notify the Paying Agent and the University of such Adjustable Interest Rate for such period by telephone or other telecommunications device and shall confirm such notice in writing as soon as practicable thereafter. The Paying Agent shall then promptly notify the State Treasurer of such Adjustable Interest Rate. Notice of the Adjustable Interest Rate for each Rate Period shall be mailed by first-class mail by the Paying Agent to each Holder on or before the second Business Day after its determination.

(c) In no event shall the Adjustable Interest Rate exceed the Maximum Interest Rate unless the Board shall have amended the Resolution to provide a higher Maximum Interest Rate pursuant to Section 801 hereof.

(d) In addition to bearing interest at the Adjustable Interest Rate, as described herein, Bank Bonds shall bear interest as provided in Section 202 hereof during any period in which such Bank Bonds are held by the Bank or its designee.

(e) The provisions of this Section 203 shall only be applicable prior to the Fixed Rate Date.