O. Reg. 275/02: VARIABLE INTEREST RATE DEBENTURES AND FOREIGN CURRENCY BORROWING

 

ontario regulation 275/02

made under the

Municipal Act, 2001

Made: September 26, 2002
Filed: September 27, 2002
Printed in The Ontario Gazette: October 12, 2002

Amending O. Reg. 247/01

(Variable Interest Rate Debentures and
Foreign Currency Borrowing)

1. Section 2 of Ontario Regulation 247/01 is revoked and the following substituted:

Variable interest rate debentures

2. All municipalities are prescribed for the purposes of subsection 412 (5) of the Act.

2. (1) Subsection 3 (1) of the Regulation is revoked and the following substituted:

Condition

(1) A municipality shall not issue a debenture with a variable interest rate if the total amount of principal to be financed under the debenture plus the total outstanding principal of all other variable interest rate bank loans and variable interest rate debentures of the municipality would exceed 15 per cent of the total outstanding principal of all undertaking or work indebtedness of the municipality plus the total amount of principal to be financed under the debenture.

(2) Subsection 3 (4) of the Regulation is revoked and the following substituted:

(4) In this section,

“outstanding principal” means,

(a) for a debenture with a sinking or retirement fund for the debenture, the difference between the principal amount of the debenture and the amount in the sinking or retirement fund,

(b) any principal amount of a bank loan or a debenture, other than a debenture in clause (a) that has not been repaid,

(c) any principal amount of temporary borrowing or advances for an undertaking to be financed by or through long-term debt that has not been repaid;

“undertaking or work indebtedness” means bank loan or debenture debt and temporary borrowing or advances for an undertaking to be financed by or through long-term debt. 

3. Section 5 of the Regulation is revoked and the following substituted:

Rating

5. All of a municipality’s long-term debt obligations must be rated, on the date the municipality issues a variable interest rate debenture,

(a) by Dominion Bond Rating Service Limited as “AA(Low)” or higher;

(b) by Moody’s Investors Service, Inc. as “Aa3” or higher; or

(c) by Standard and Poor’s as “AA-” or higher. 

4. Clause 6 (a) of the Regulation is revoked and the following substituted:

(a) a person who has one or more debt obligations which on the date the agreement is entered are rated,

(i) by Dominion Bond Rating Service Limited as “AA(Low)” or higher,

(ii) by Moody’s Investors Service, Inc. as “Aa3” or higher, or

(iii) by Standard and Poor’s as “AA-” or higher; or

5. Section 7 of the Regulation is revoked and the following substituted:

Foreign currency debentures

7. All municipalities are prescribed for the purposes of section 411 of the Act as municipalities that may issue foreign currency debentures.

6. Section 8 of the Regulation is amended by striking out “subsection 146 (2)” and substituting “section 411”.

7. Clause 9 (b) of the Regulation is revoked and the following substituted:

(b) all of the long-term debt obligations of the municipality are rated, on the date the debenture is issued,

(i) by Dominion Bond Rating Service Limited as “AA(Low)” or higher,

(ii) by Moody’s Investors Service, Inc. as “Aa3” or higher, or

(iii) by Standard and Poor’s as “AA-” or higher. 

8. Clause 10 (1) (a) of the Regulation is revoked and the following substituted:

(a) a person who has one or more debt obligations which on the date the agreement is entered are rated,

(i) by Dominion Bond Rating Service Limited as “AA(Low)” or higher,

(ii) by Moody’s Investors Service, Inc. as “Aa3” or higher, or

(iii) by Standard and Poor’s as “AA-” or higher; or

9. This Regulation comes into force on January 1, 2003.

41/02