OAR 172-005-0050: Investment Grade Bonds; Agent for Disclosure Purposes

(1)(a) It is the policy of the Authority that all bonds proposed to be sold pursuant to a public offering shall have received an investment grade rating at the time of issuance and if such investment grade rating cannot be attained on the basis of the project or the participating institution’s credit rating, the participating institution must procure an appropriate credit enhancement device which will secure the bonds in a manner that will result in an investment grade rating at the time of issuance. If bonds proposed to be sold pursuant to a public offering receive a rating of at least investment grade but below BBB+ by Standard & Poor’s, Baa1 by Moody’s Investors Service or BBB+ by Fitch, the participating institution shall procure a second rating on the bonds of at least investment grade at the time of issuance. In addition, it is the policy of the Authority that unrated bonds or bonds not receiving a rating of at least investment grade at the time of issuance may not be sold pursuant to a public offering and may be sold only to (i) a bank as defined in Section 3(a)(2) of the Securities Act of 1933, as amended (the "1933 Act"), or a savings and loan association or other institution described in Section 3(a)(5)(a) of the 1933 Act or (ii) qualified institutional buyers, as such term is defined under Rule 144A promulgated under the 1933 Act. The Authority, in its discretion, may make exceptions to the foregoing policy based upon such factors as it deems appropriate, which factors shall be set forth in the record of the Authority meeting granting any such exception. (b) In connection with the issuance of any bonds, the Authority may require the participating institution and the underwriter to undertake certain contractual obligations and to provide indemnity or other protection to the Authority, the State of Oregon and their respective members, officials, officers and employees with respect to the requirements of federal and state securities laws, based on the advice of bond counsel or the Department of Justice of the State of Oregon and the established practice of other conduit bond issuers. (2) As used in this section “investment grade" shall mean a rating of at least BBB- by Standard & Poor's, Baa3 by Moody's Investors Service or BBB- by Fitch. (3) As used in this section “underwriter” shall mean any person conducting a public or other offering as managing underwriter, senior managing underwriter, placement agent, lead financial institution in a placement with several financial institutions or other similar role.