Sec. 10a-204b. Issuance of bonds.
Sec. 10a-204b. Issuance of bonds. (a) The Connecticut Student Loan Foundation,
a nonprofit corporation is authorized from time to time to issue, or to cause a subsidiary
created pursuant to subdivision (5) of section 10a-204 to issue, bonds, notes or other
obligations in such principal amounts as in the opinion of the corporation shall be necessary to provide sufficient funds for carrying out the purposes set forth in subdivisions
(2) and (3) of section 10a-201 including the payment, funding or refunding of the principal of, or interest or redemption premiums on, any bonds, notes or other obligations
issued by it, or by such a subsidiary, whether the bonds, notes or other obligations or
interest to be funded or refunded have or have not become due, the establishment of
reserves to secure such bonds, notes or other obligations and all other expenditures of
the corporation, or of such subsidiary, incident to and necessary or convenient to carry
out the purposes set forth in subdivisions (2) and (3) of section 10a-201.
(b) (1) Except as may be otherwise expressly provided by this section or by any
resolution adopted by the corporation authorizing the issuance of bonds, notes or other
obligations every issue of bonds, notes or other obligations shall be general obligations
of the corporation payable out of any moneys or revenues of the corporation subject
only to any agreements with the holders of particular bonds, notes or other obligations
pledging any particular moneys or revenues, or any specific pool of loans acquired by,
the corporation. Any such bonds, notes or other obligations may be additionally secured
by a pledge of any grant or contributions from any department, agency or instrumentality
of the United States or person or a pledge or assignment of any moneys, income or
revenues of the corporation or payable to the corporation from any source.
(2) Except as may be otherwise expressly provided by this section or by any resolution adopted by a subsidiary created pursuant to subdivision (5) of section 10a-204
authorizing the issuance of bonds, notes or other obligations, every issue of bonds, notes
or other obligations shall be general obligations of the subsidiary payable out of any
moneys or revenues of the subsidiary subject only to any agreements with the holders
of particular bonds, notes or other obligations pledging any particular moneys or revenues, or any specific pool of loans acquired by the subsidiary. Any such bonds, notes
or other obligations may be additionally secured by a pledge of any grant or contributions
from any department, agency or instrumentality of the United States or person or a
pledge or assignment of any moneys, income or revenues of the subsidiary or payable
to the subsidiary from any source.
(c) Notwithstanding any provision of the general statutes, any bonds, notes or other
obligations issued by the corporation or by a subsidiary created pursuant to subdivision
(5) of section 10a-204 pursuant to this section shall be fully negotiable within the meaning and for all purposes of title 42a, whether or not the form and character so qualify
under the terms thereof, subject only to the provisions of the authorizing resolution.
Any such bonds are hereby made securities in which public officers and public bodies
of the state and its political subdivisions, all insurance companies, credit unions, savings
and loan associations, investment companies, banking associations, trust companies,
executors, administrators, trustees and other fiduciaries and pension, profit-sharing and
retirement funds may properly and legally invest funds, including capital in their control
or belonging to them, and are hereby made securities which may properly and legally
be deposited with and received by any state or municipal officer or any agency or political
subdivision of the state for any purpose for which the deposit of bonds or other obligations of the state is now or may hereafter be authorized by law.
(d) Bonds, notes or other obligations of the corporation shall be authorized by resolution of the corporation. Bonds, notes and other obligations of a subsidiary created
pursuant to subdivision (5) of section 10a-204 shall be authorized by resolution of the
subsidiary. Such bonds, notes and other obligations may be issued in one or more series
and shall bear such date or dates, mature at such time or times, in the case of any such
note, or any renewal of any such note, not exceeding five years from the date of the
original issue of such notes, and, in the case of bonds, not exceeding forty years from
the date of the original issue of such bonds bear interest at such rate or rates, be in such
denomination or denominations, be in such form, either coupon or registered, carry such
conversion or registration privileges, have such rank or priority, be executed in such
manner, be payable from such sources in such medium of payment at such place or
places within or without this state, and be subject to such terms of redemption, with or
without premium, as the applicable authorizing resolution or resolutions may provide.
Any such resolution may delegate to the president of the issuer, acting solely or in
combination with any one or more directors, the power to determine any details of the
bonds, notes or other obligations authorized by the resolution and to award such bonds,
notes or other obligations to purchasers.
(e) Bonds, notes or other obligations of the corporation may be sold at public or
private sale at such price or prices as the corporation shall determine. Bonds, notes or
other obligations of a subsidiary created pursuant to subdivision (5) of section 10a-204
may be sold at public or private sale at such price or prices as the subsidiary shall
determine.
(f) Bonds, notes or other obligations of the corporation may be refunded and renewed from time to time as may be determined by resolution of the corporation and
bonds, notes or other obligations of a subsidiary created pursuant to subdivision (5) of
section 10a-204 may be refunded and renewed from time to time as may be determined
by resolution of the subsidiary, provided any such refunding or renewal shall be in
conformity with any rights of the holders of the affected bonds, notes or other obligations.
(g) Bonds, notes or other obligations of the corporation issued under the provisions
of this section shall not be deemed to constitute a debt or liability of the state or of any
political subdivision of the state other than the corporation or a pledge of the faith and
credit of the state or of any such political subdivision, and shall not constitute bonds or
notes issued or guaranteed by the state within the meaning of section 3-21 but shall be
payable solely from the funds provided for under this section. Bonds, notes or other
obligations of a subsidiary created pursuant to subdivision (5) of section 10a-204 issued
under the provisions of this section shall not be deemed to constitute a debt or liability
of the state or of any political subdivision of the state or a pledge of the faith and credit
of the state or of any such political subdivision and shall not constitute bonds or notes
issued or guaranteed by the state within the meaning of section 3-21 but shall be payable
solely from the funds provided for under this section. All such bonds, notes or other
obligations shall contain on the face thereof a statement to the effect that neither the
state of Connecticut nor any political subdivision of the state shall be obligated to pay
the same, that such bonds, notes or other obligations and the interest on such bonds,
notes or other obligations shall be payable by the issuer solely from revenues or other
funds of the issuer pledged therefor and that neither the faith and credit nor the taxing
power of the state of Connecticut or of any political subdivision of the state is pledged
to the payment of the principal of or the interest on such bonds, notes or other obligations.
(h) Any resolution or resolutions authorizing the issuance of bonds, notes or other
obligations may contain provisions, except as expressly limited in this section and except
as otherwise limited by existing agreements with the holders of bonds, notes or other
obligations, which shall be a part of the contract with the holders thereof, as to the
following: (1) The pledging and assignment of all or any part of the moneys received
by or payable to the issuer, (A) in payment of loans and interest thereon, (B) as guarantee
or insurance payments with respect to loans and interest thereon, or (C) otherwise with
respect to loans and interest thereon and other moneys received by or payable to the
issuer, to secure the payment of any bonds, notes or other obligations or any issues
thereof and the interest thereon; (2) the pledging and assignment of all or any part of
the assets of the issuer including, but not limited to, loans and the rights to receive
payments pursuant to and enforce contracts with respect to loans and interest thereon,
to secure the payment of principal and interest on any bonds, notes or other obligations
or of any issue thereof; (3) the use and disposition of the gross income from, and the
payments of principal received by or payable to the issuer on, loans held by or on behalf
of the issuer; (4) the establishment of reserves or sinking funds, the making of charges
and fees to provide for the same, and the regulation and disposition thereof; (5) limitations on the purpose to which the proceeds of sale of bonds, notes or other obligations
may be applied and pledging such proceeds to secure the payment of the bonds, notes
or other obligations, or of any issues thereof and the interest thereon; (6) limitations
on the issuance of additional bonds, notes or other obligations, the terms upon which
additional bonds, notes or other obligations may be issued and secured and the refunding
or purchase of outstanding bonds, notes or other obligations of the issuer; (7) the procedure, if any, by which the terms of any contract with the holders of any bonds, notes or
other obligations of the issuer may be amended or abrogated, the amount of bonds, notes
or other obligations the holders of which must consent thereto, and the manner in which
such consent may be given; (8) limitations on the amount of moneys to be expended by
the issuer for operating, administrative or other expenses of the issuer; (9) the vesting
in a trustee or trustees of such property, rights, powers and duties in trust as the issuer
may determine, which may include any or all of the rights, powers and duties of any
trustee appointed by the holders of any bonds, notes or other obligations and limiting
or abrogating the right of the holders of any bonds, notes or other obligations of the
issuer to appoint a trustee under this chapter or limiting the rights, powers and duties
of such trustee; (10) a trust agreement by and between the issuer and a corporate trustee
which may be any trust company or bank having the powers of a trust company within
or without the state, which agreement may provide for the pledging or assigning of any
assets or income from assets to which or in which the issuer has any rights or interests,
and may further provide for such other rights and remedies exercisable by the trustee
as may be proper for the protection of the holders of any bonds, notes or other obligations
of the issuer and not otherwise in violation of law, which agreement may provide for
the restriction of the rights and remedies of any individual holder of bonds, notes or
other obligations of the issuer and which agreement may contain any further provisions
which are reasonable and proper to delineate further the respective rights, duties, safeguards, responsibilities and liabilities of the issuer, of individual and collective holders
of bonds, notes and other obligations of the issuer and the trustee and may further provide
that all expenses incurred in carrying out the provisions of such trust agreement may
be treated as a part of the cost of operation of the issuer; (11) covenants to do or refrain
from doing such acts and things as may be necessary or convenient or desirable in order
to better secure any bonds, notes or other obligations of the issuer, or which, in the
discretion of the issuer, will tend to make any bonds, notes or other obligations to be
issued more marketable notwithstanding that such covenants, acts or things may not be
enumerated herein; (12) the satisfaction of federal requirements; and (13) any other
matters of like or different character, which in any way affect the security or protection
of the bonds, notes or other obligations.
(i) Any pledge made by the corporation or by any subsidiary created pursuant to
subdivision (5) of section 10a-204 of income, revenues or other property to secure bonds,
notes or other obligations of the corporation or to secure bonds, notes or other obligations
of such a subsidiary shall be valid and binding from the time the pledge is made. The
income, revenue or other property so pledged and thereafter received by or on behalf
of the corporation or of the subsidiary, as applicable, shall immediately be subject to
the lien of such pledge without any physical delivery thereof or further act, and the lien
of any such pledge shall be valid and binding as against all parties having claims of any
kind in tort, contract or otherwise against the corporation or against the subsidiary, as
applicable, irrespective of whether such parties have notice thereof. Any such lien shall
have priority over all other liens, including, without limitation, the lien of any person
who in the ordinary course of business furnishes services or materials to the corporation
or to the subsidiary, as applicable. Notwithstanding any provision of the general statutes,
neither possession nor the filing of any financing or continuation statement or other
instrument shall be necessary with respect to any such income, revenues or other property to establish or evidence the lien of any such pledge with respect thereto. Neither
this section, nor any resolution authorizing bonds, notes or other obligations, nor any
trust agreement nor any other instrument by which such a pledge is created need be
recorded. Any pledge or lien described by this subsection shall be conclusively deemed
to be a pledge or lien described by subdivision (14) of subsection (d) of section 42a-9-109, notwithstanding that the corporation is not, and that any such subsidiary shall not
be, either a political subdivision or an agency of the state.
(j) The corporation or any subsidiary created pursuant to subdivision (5) of section
10a-204 is authorized and empowered to obtain from any department, agency or instrumentality of the United States any insurance or guarantee as to, or of or for the payment
or repayment of, interest or principal, or both, or any part thereof, on any loans, or on
any bonds, notes or other obligations issued by the corporation or by the subsidiary, as
applicable, pursuant to the provisions of this section and, notwithstanding any other
provisions of this chapter, to enter into any agreement, contract or any other instrument
whatsoever with respect to any such insurance or guarantee or with respect to the origination, servicing, collection and administration of loans, except to the extent that such
action would in any way impair or interfere with the ability of the corporation or of the
subsidiary, as applicable, to perform and fulfill the terms of any agreement made with
the holders of its bonds, notes or other obligations of the corporation or subsidiary.
(k) None of the members of the board of directors of the corporation, or the members
of the board of directors of the subsidiary created pursuant to subdivision (5) of section
10a-204 or any person executing bonds, notes or other obligations issued pursuant to
this section shall be liable personally on such bonds, notes or other obligations by reason
of the issuance thereof. Any resolution authorizing the issuance of bonds, notes or other
obligations may provide for the indemnification by the issuer of the members of the
board of directors of the corporation or the members of the board of directors of such
a subsidiary and of any such person executing such bonds, notes or other obligations
with respect to such bonds, notes or other obligations and the issuance thereof.
(l) The corporation and any subsidiary created pursuant to subdivision (5) of section
10a-204 shall have power to purchase, hold and resell bonds, notes or other obligations
of the corporation or of any such subsidiary out of any funds available therefor. The
issuer of such bonds, notes or other obligations may hold, cancel or resell such bonds,
notes or other obligations subject to and in accordance with agreements with holders
of its bonds, notes and other obligations.
(m) All moneys received by or on behalf of the corporation or by or on behalf of a
subsidiary created pursuant to subdivision (5) of section 10a-204, as applicable, pursuant
to or subject to the pledge of any resolution or trust agreement authorized by this section,
whether as proceeds from the sale of bonds or as revenues, shall be deemed to be trust
funds to be held and applied solely as provided in such resolution or trust agreement.
Subject to the provisions of any resolution authorizing the issuance of bonds, notes or
other obligations, any such moneys may be invested in the Connecticut Short-Term
Investment Fund and in such other investments and investment agreements as may be
approved by resolution of the issuer. The issuer shall fund borrower fee reductions,
interest rate reductions, rebates, loan forgiveness or other borrower benefits allowable
under the programs authorized by this chapter in an aggregate annual amount at least
equal to the net reduction in program financing cost achieved by the issuer in each year
through the issuance of private activity bonds, as defined in section 32-140, taking into
account any federal loan program terms and any federal loan program or tax requirements resulting from such financing. Any officer with whom, or any bank or trust company with which, such moneys shall be deposited shall act as trustee of such moneys
and shall hold and apply the same for the purposes hereof, subject to such regulations
as this chapter and the resolution authorizing the bonds of any issue or the trust agreement
securing such bonds may provide.
(n) Any holder of bonds, notes or other obligations issued under the provisions of
this section or any of the coupons appertaining thereto, and the trustee or trustees under
any trust agreement, except to the extent the rights herein given may be restricted by
any resolution authorizing the issuance of, or any such trust agreement securing, such
bonds, notes or other obligations, may, either at law or in equity, by suit, action, mandamus or other proceedings, protect and enforce any and all rights under the laws of the
state or granted hereunder or under such resolution or trust agreement, and may enforce
and compel the performance of all duties required by this section or by such resolution
or trust agreement to be performed by the issuer or by any officer, employee or agent
of the issuer, including the appointment of a receiver to administer any loans or other
pledged assets and revenues.
(o) The corporation and any subsidiary created pursuant to subdivision (5) of section
10a-204 is authorized and empowered, from time to time, to issue bonds, notes or other
obligations the interest on which, if so designated by resolution of the issuer, shall be
includable in the gross income of the holder or holders of such bonds, notes or other
obligations under the Internal Revenue Code of 1986 or any subsequent corresponding
internal revenue code of the United States, as from time to time amended, and in the
same manner that interest on bills, bonds, notes or other obligations of the United States
is includable in the gross income of the holder or holders thereof under said Internal
Revenue Code; the state hereby consents to such inclusion only for the bonds, notes
and other obligations of the corporation or such a subsidiary, as applicable, authorized
by this section.
(p) In connection with, or incidental to, the issuance or carrying of bonds, notes or
other obligations, or acquisition or carrying of any investment or program of investment,
the corporation or any subsidiary created pursuant to subdivision (5) of section 10a-204
may enter into any contract with any financial institution having a rating of at least "A",
or into any contract secured by security so rated, which the issuer determines to be
necessary or appropriate to place the obligation or investment of the issuer, as represented by the bonds, notes or other obligations, investment or program of investment
and the contract or contracts, in whole or in part, on the interest rate cash flow or other
basis desired by the issuer.
(q) In connection with, or incidental to, the issuance or carrying of bonds, notes
or other obligations or entering into any of the contracts or agreements referred to in
subsection (p) of this section, the corporation or any subsidiary created pursuant to
subdivision (5) of section 10a-204 may enter into credit enhancement or liquidity
agreements, with payment, interest rate, security, default, remedy and other terms and
conditions as the issuer determines.
(r) The state covenants with the purchasers and all other subsequent owners and
transferees of bonds, notes or other obligations issued by the corporation or by any
subsidiary created pursuant to subdivision (5) of section 10a-204 pursuant to this section,
in consideration of the acceptance of and payment for the bonds, notes or other obligations, until the bonds, notes or other obligations, together with the interest thereon, with
interest on any unpaid installment of interest and all costs and expenses in connection
with any action or proceeding on behalf of the owners, are fully met and discharged or
unless expressly permitted or otherwise authorized by the terms of each contract and
agreement made or entered into by or on behalf of the issuer with or for the benefit of
such owners, that the state: (1) Will not create or cause to be created any lien or charge
on the assets or revenues pledged to secure such bonds, notes or other obligations, other
than a lien or pledge created thereon pursuant to this section; (2) will not in any way
impair the rights, exemptions or remedies of the owners; and (3) will not limit, modify,
rescind, repeal or otherwise alter the rights or obligations of the issuer to take such action
as may be necessary to fulfill the terms of the resolution authorizing the issuance of the
bonds, notes or other obligations; provided nothing in this section shall preclude the
state from exercising its power, through a change in law, to limit, modify, rescind, repeal
or otherwise alter this chapter if and when adequate provision shall be made by law for
the protection of the holders of outstanding bonds, notes or other obligations, pursuant
to the resolution under which the bonds, notes or other obligations are issued. The state
further covenants with the purchasers and all subsequent owners and transferees of
bonds, notes or other obligations issued by the corporation or by such a subsidiary
pursuant to this section, in consideration of the acceptance of and payment for the bonds,
notes or other obligations that, notwithstanding any provision of title 12, the bonds,
notes or other obligations shall be free at all times from taxes levied by any municipality
or political subdivision or special district having taxing powers of the state, and the
principal and interest of any bonds, notes or other obligations issued under the provisions
of this section, the transfer of such bonds, notes or other obligations and the income
from such bonds, notes or other obligations, including any profit on the sale or transfer
of such bonds, notes or other obligations, shall at all times be exempt from any taxation
by the state or under its authority, except for estate or succession taxes. The issuer is
authorized to include covenants of the state provided for in this subsection, as a contract
of the state, in any agreement with the owners of any bonds, notes or other obligations,
in any credit facility or reimbursement agreement with respect to the bonds, notes or
other obligations and in any agreement authorized by subsection (p) or (q) of this section.
(s) The provisions of this section shall be deemed to provide a complete, additional
and alternative method for the actions and the things authorized thereby and shall be
regarded as supplemental and additional to powers granted by other laws; the issuance
of bonds, notes or other obligations under the provisions of this section need not comply
with the requirements of any law applicable to the issuance of bonds, notes or other
obligations. This section, being necessary for the welfare of the state and its inhabitants,
shall be liberally construed to affect its purpose. None of the powers granted to the
corporation or to any subsidiary created pursuant to subdivision (5) of section 10a-204
under the provisions of this section shall be subject to the supervision or regulation
or require the approval or consent of any municipality or political subdivision or any
department, division, commission, board, body, bureau, official or agency thereof or of
the state, and the exercise thereof shall not cause the corporation or any such subsidiary
to be construed to be an agency within the scope of chapter 54 or a department, institution
or agency of the state.
(t) Notwithstanding the provisions of subsections (a) to (s), inclusive, of this section,
any subsidiary created by a corporation pursuant to subdivision (5) of section 10a-204
may issue bonds, notes or other obligations to refund corporation bonds if approved
by resolution of the subsidiary, and the corporation may issue bonds, notes or other
obligations to refund subsidiary bonds, if approved by resolution of the corporation. No
bond, note or other obligation issued by any such subsidiary shall constitute a debt or
liability of the corporation, except as may be designated by resolution of the corporation,
or of any other subsidiary created pursuant to subdivision (5) of section 10a-204 except
as may be designated by resolution of such other subsidiary. No bond, note or other
obligation of the corporation shall constitute a debt or liability of a subsidiary, except
as may be designated by resolution of such subsidiary. Any subsidiary created for the
purpose of financing student loans originated pursuant to Title IV, Part B of the Higher
Education Act of 1965, as from time to time amended, through the issuance of bonds,
notes or other obligations that bear interest that may be excludable from the gross income
of the holder or holders of such bonds, notes or other obligations under the provisions
of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue
code of the United States, as from time to time amended, shall be conclusively deemed
to have been organized at the request of the state for purposes of Section 150(d)(2) of
said Internal Revenue Code.
(u) Notwithstanding the provisions of this section, no subsidiary created pursuant
to subdivision (5) of section 10a-204, other than a nonprofit subsidiary, shall be authorized to issue bonds, notes or other obligations pursuant to this section, provided this
subsection shall not be deemed to preclude the incurrence of debt, other than through
the public issuance of bonds, notes or obligations, by a for-profit subsidiary to provide
sufficient funds for carrying out the provisions of subdivision (3) of section 10a-201.
(P.A. 94-245, S. 40, 46; P.A. 01-102, S. 3, 4, 7; May Sp. Sess. P.A. 04-2, S. 65; P.A. 05-184, S. 4; P.A. 06-196, S. 80;
P.A. 07-109, S. 4.)
History: P.A. 94-245 effective June 2, 1994, (Revisor's note: The references in Subsec. (a) to "Title 4 Part B of the
Higher Education Act of 1965" were changed editorially by the Revisors to "Title IV, Part B...." for consistency with other
statutory references); P.A. 01-102 amended Subsec. (a) to remove language specifying that board's authority relates to
loans originating "pursuant to Title IV, Part B of the Higher Education Act of 1965, 20 USC 1071 et seq." and amended
Subsec. (r) to make technical changes, effective June 6, 2001; May Sp. Sess. P.A. 04-2 amended Subsec. (i) to specify that
pledges made by the corporation governed by subsection are those to secure bonds, notes or other obligations of the
corporation, added provision re priority of liens and provided that pledge or lien described by subsection shall be conclusively deemed a pledge or lien described by Sec. 42a-9-109(d)(14), effective May 12, 2004, and applicable to any pledge,
lien or security interest of the corporation in existence on October 1, 2003, or created after that date; P.A. 05-184 amended
Subsec. (a) by substituting references to Subsecs. (3) and (4) with references to Subdivs. (2) and (3) of Sec. 10a-201,
amended Subsec. (b) by eliminating language re the limitation in the subsection and by adding references to assignment
and payable to the corporation, made technical changes in Subsecs. (c), (g), (o), (p), (q), (r) and (s), amended Subsec. (d)
by increasing from 30 to 40 years the period from the original issue of the bonds, amended Subsec. (h) by redesignating
existing clauses (i) to (xiii) as Subdivs. (1) to (13) and by permitting resolutions to contain provisions concerning moneys
payable to the corporation and the assignment of assets of the corporation, amended Subsec. (m) by including moneys
received on behalf of the corporation or subject to the pledge of resolution or trust agreement, amended Subsec. (p) by
replacing a rating of at least AA with a rating of at least A, and amended Subsec. (r) by redesignating existing clauses (i)
to (iii) as Subdivs. (1) to (3), effective July 1, 2005; P.A. 06-196 made a technical change in Subsec. (c), effective June 7,
2006; P.A. 07-109 amended Subsecs. (a), (e), (o) and (s) to add language re subsidiary, amended Subsec. (b) to make
technical changes, designate existing language as Subdiv. (1) and add Subdiv. (2) re subsidiary, amended Subsecs. (c),
(d), (f), (g) and (i) to (l) to make technical changes and add language re subsidiary, amended Subsec. (h) to replace
"corporation" with "issuer" and make technical changes, amended Subsec. (m) to add language re subsidiary and re
borrower benefits, amended Subsec. (n) to replace "corporation" with "issuer" and add language re pledged assets and
revenues, amended Subsecs. (p) and (q) to replace "corporation" with "issuer" and add language re subsidiary, amended
Subsec. (r) to make technical changes, replace "corporation" with "issuer", and add language re subsidiary and re subsequent
owners and transferees, added Subsec. (t) re issuance and character of bonds, notes or other obligations and added Subsec.
(u) limiting or prohibiting certain subsidiaries from issuing bonds, notes or other obligations, effective July 1, 2007.