Code of Virginia

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Code of Virginia
Title 23.1. Institutions of Higher Education; Other Educational and Cultural Institutions
Chapter 12. Virginia College Building Authority
12/3/2022

§ 23.1-1208. Security for bonds.

A. The Authority may secure any bonds issued under the provisions of this article by a trust indenture by and between the Authority and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or outside the Commonwealth. Such trust indenture or the resolution providing for the issuance of such bonds may:

1. Pledge or assign all or part of the funds of the Authority available for such purpose, including (i) payments of principal of and interest on bonds of eligible institutions purchased by the Authority; (ii) proceeds of the sale of any such bonds; (iii) payments of principal of and interest on obligations transferred to the Authority by the General Assembly or from other assets or moneys transferred to the Authority by the General Assembly or eligible institutions, including lease payments and other sources of revenue; (iv) proceeds of the sale of any such obligations or assets; (v) proceeds from the sale of bonds of the Authority; (vi) security interests granted by the Authority or any eligible institution in, or other liens on, equipment, whether such equipment has been leased or sold to an eligible institution; (vii) all or part of the payments due the Authority from eligible institutions under any lease, sale agreement, loan, or other agreement between the Authority and eligible institutions pursuant to § 23.1-1206, and any funds realized from enforcing security for such payments; (viii) payments due under policies of bond insurance, letters of credit, or other credit enhancement securing payment of principal of and interest on bonds of the Authority; (ix) any moneys in any fund established pursuant to § 23.1-1206; (x) any reserve or sinking fund created by the Authority to secure such bonds; and (xi) other available funds of the Authority;

2. Pledge or assign any other rights of the Authority in equipment owned by, or leases or sales of equipment made by, the Authority;

3. Contain such provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law;

4. Provide for the creation and maintenance of such reserves as the Authority determines to be proper;

5. Include covenants setting forth the duties of the Authority in relation to the acquisition of any equipment or bonds of eligible institutions; the care, leasing, or sale of equipment to eligible institutions; the substitution of any bonds of eligible institutions, equipment, lease, security interest, or other security as security for the payment of the bonds of the Authority; the care, use, and insurance of equipment; the repossession and sale of leased or sold equipment by the Authority or the trustee under any trust indenture upon any default under the lease or sale of such equipment; and the collection of (i) payments due the Authority under leases or agreements of sale of equipment and (ii) payments of principal of and interest on any bonds of eligible institutions or obligations or other assets held by the Authority. Any bank or trust company incorporated under the laws of the Commonwealth that acts as depository of the proceeds of bonds or revenues may furnish such indemnifying bonds or pledge such securities as may be required by the Authority;

6. Set forth the rights and remedies of the bondholders and the trustee;

7. Restrict the individual right of action by bondholders; and

8. Contain such other provisions as the Authority deems reasonable and proper for the security of the bondholders.

B. All expenses incurred in carrying out the provisions of any such trust indenture or resolution may be treated as a part of the administration costs of the Authority.

C. Neither the resolution nor any trust indenture by which a pledge is created need be filed or recorded except in the records of the Authority.

1964, c. 607, § 23-30.29; 1966, c. 685; 1986, c. 597; 1996, cc. 672, 689; 2016, c. 588.

The chapters of the acts of assembly referenced in the historical citation at the end of this section may not constitute a comprehensive list of such chapters and may exclude chapters whose provisions have expired.