§ 45-48.1-14 - Defeasance of bonds or notes.
SECTION 45-48.1-14
§ 45-48.1-14 Defeasance of bonds or notes.– The district may at any time deposit with a trustee, a sum sufficient, withamounts then on deposit, including the debt service reserve fund, to purchasedirect or guaranteed obligations of the United States of America which areadequate to pay the entire principal amount of the bonds or notes of a series,together with the interest to maturity, or to an applicable redemption datespecified by the district to the trustee and any applicable redemption premium;or the district may deposit direct or guaranteed obligations of the UnitedStates of America in lieu of money for their purchase. The obligations aredeemed adequate if the principal and interest payable on them are sufficient topay the previously mentioned sums when due. Upon any deposit of money and arequest by the district, the trustee shall purchase direct or guaranteedobligations of the United States of America. When adequate direct or guaranteedobligations of the United States of America are held by the trustee pursuant tothis section, the bond resolution or indenture shall cease to be in effect withrespect to such series of bonds or notes. The obligations and their proceedsshall be held in trust for the benefit of the bondholders or noteholders, andthe trustee shall, on behalf of the district, call bonds or notes forredemption on the applicable redemption date. Any compensation or expenses ofthe trustee in carrying out this section shall be paid by the district, and anysurplus funds held by the trustee under this section shall be remitted by thetrustee to the district.