67.15 Variable rate obligations.

353 words·~2 min read·/wi/chapter-67/67-15

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(1)In this section:

(a)“Credit facility” means a standby or direct payment letter of credit, an insurance policy or other commitment to pay the principal of, or interest on, a municipal obligation.

(b)“Liquidity facility” means a standby or direct payment letter of credit or other commitment to purchase, or provide funds for the purchase of, a municipal obligation presented for purchase under a put option.

(c)“Put option” means the right of the holder or owner of a municipal obligation to present that municipal obligation to the municipality which issued it, its designee or a 3rd party for purchase by that municipality, designee or 3rd party.

(d)“Tendered obligation” means a municipal obligation which is presented for purchase when a put option is exercised.

(e)“Variable interest rate” or “variable rate” means a rate of interest greater than zero which is subject to change from time to time under sub.

(2).

(f)“Variable rate obligation” means a municipal obligation which bears interest at a variable rate.

(2)Any municipal obligation issued under this chapter or ch. 66 may have a variable interest rate. If a municipality issues a municipal obligation with a variable interest rate, the governing body of the municipality shall adopt and record a resolution providing the following:

(a)A procedure, method, formula or index by which the interest rate may change from time to time.

(b)A stated maximum interest rate for the municipal obligation or for each maturity of the municipal obligation.

(3)A resolution under sub.

(2)may provide for changing the interval at which the interest rate may change and for converting the variable rate to a fixed rate.

(4)In a resolution under sub.

(2), a municipality may grant or provide for a put option for the holders or owners of any municipal obligation issued under the resolution and may provide in the resolution for the price at which tendered obligations will be purchased. A put option may provide for exercise at one or more designated times or upon a specified period of notice by holders and owners.