An authority may issue refunding securities, but the proceeds must be used only for specified refunding-related purposes, with a limited exception approved by the board.
(a) An authority may at any time, and from time to time, sell and issue its refunding securities for the purpose of refunding the principal of and interest on any then outstanding securities of the authority, whether or not the securities shall have matured or be redeemable at the option of the authority at the time of the refunding, and for the payment of any expenses incurred in connection with the refunding and any premium or other sum necessary to be paid to redeem or retire the securities so to be refunded. The principal amount of securities that the authority may at any time issue for refunding purposes shall not exceed the sum of the following: (1) The outstanding principal or face amount of the securities refunded thereby. (2) The unpaid interest accrued or to accrue thereon to their respective maturities, or, in the event the securities to be refunded, or any part thereof, are to be retired prior to their respective maturities, the interest accrued or to accrue thereon to the date or dates on which they are to be retired. (3) Any premium or other sum necessary to be paid to redeem or retire the securities to be refunded, but only if the securities are in fact to be redeemed or retired prior to their respective maturities. (4) The expenses estimated to be incurred in connection with the refunding. The authority may also at any time, and from time to time, sell and issue its securities for the combined purpose of refunding any of its securities and of obtaining funds for any other purpose for which it is authorized by this chapter to sell and issue securities, in which event the provisions of this chapter relating to refunding securities shall apply only to those securities issued for refunding purposes. (b) The principal proceeds derived by the authority from the sale of any refunding securities shall be used only for the payment of the principal of and the interest and premium on the securities being refunded and for payment of the expenses referred to in the preceding subdivision (4) of subsection (a). Notwithstanding the foregoing, if, in the judgment of the board, it is necessary or desirable to effect an advantageous refunding, a portion of the proceeds may be used for payment of principal of and interest on the refunding securities themselves and the remainder of the proceeds for payment of the securities being refunded and of the expenses. Any portion of the proceeds that shall at the time not be needed therefor, may be invested in those investments specified in Section 11-101A-20. (c) Any refunding may be effected either by sale of refunding securities and the application of the proceeds thereof as provided in subsection (b), or by exchange of the refunding securities for the securities to be refunded thereby, or by any combination thereof. Notwithstanding the foregoing, the holders of any securities to be refunded shall not be compelled without their consent to surrender their securities for payment or exchange prior to the date on which they may be paid or redeemed by call of the authority under their respective provisions. All provisions of this chapter pertaining to securities of the authority that are not inconsistent with this section shall, to the extent applicable, also apply to refunding securities issued by the authority and to securities issued by the authority for both refunding and other purposes.