Oregon Administrative Rules
Chapter 170 - OREGON STATE TREASURY
Division 40 - PUBLIC FUNDS COLLATERALIZATION RULES
Section 170-040-0030 - Approval of Loan Repayment Obligations Pledged by Depositories

Universal Citation: OR Admin Rules 170-040-0030

Current through Register Vol. 63, No. 9, September 1, 2024

(1) Loan repayment obligations owed by a county, city, school district, port district or other public body in the State of Oregon may be pledged by a depository as collateral only after the depository has received written approval from the Office of the State Treasurer (OST). However, the OST will not accept requests for and approve such loans as collateral, unless and until written notice is provided to depositories that, from a date designated in the notice, OST will begin to accept such requests and evaluate the acceptability of such loans as collateral. In the event OST approves such loans as collateral, the loans will be valued at seventy-five percent of their outstanding principal amount for purposes of calculating whether adequate collateral has been pledged by a depository with its custodian, as required under ORS Chapter 295.

(2) After receipt of the notice described above, the depository shall submit a written request to the OST containing the following information:

(a) The name of the payment obligor under the loan;

(b) The original principal balance of the loan;

(c) The current unpaid principal balance of the loan;

(d) The maturity date for the loan;

(e) Whether the loan may be repaid prior to maturity;

(f) The credit rating (if applicable) of the general obligations of the obligor;

(g) The credit enhancement (such as insurance), if any, for the loan;

(h) Whether an event of default has ever occurred under the loan; and

(i) Whether the obligor has defaulted with respect to the payment of principal or interest on any of its loans or similar obligations within the preceding 10 years or during the period of its existence if that is less than 10 years.

(3) The OST will permit a loan to be pledged as security only if:

(a) The public body has not been in default with respect to the payment of principal or interest on any of its loans within the preceding 10 years or during the period of its existence if that is less than 10 years;

(b) If rated by a rating agency, the public body's general obligations have a credit rating of AA or Aa;

(c) If the loan is credit enhanced, the provider of the credit enhancement has a credit rating of, AA or Aa;

(d) If the above referenced ratings are not available, OST determines, based on the information submitted to it, that the loan is of sufficiently high credit quality that it may be pledged as collateral; and

(e) The unpaid principal amount of the loans pledged does not exceed 30% of the depository's collateral.

Stat. Auth.:

Stats. Implemented: ORS 295.001(19)(f)

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