Or. Rev. Stat. § 286A.110 – Agreements for exchange of interest rates

(1) A related agency with the approval of the State Treasurer, or the State Treasurer on behalf of a related agency, may enter into agreements for exchange of interest rates with counterparties. Agreements for exchange of interest rates may be made to manage payment, interest rate, spread or similar exposure undertaken in connection with a related bond upon a determination by the related agency, or by the State Treasurer on behalf of the related agency, that the agreement benefits the State of Oregon.
(2) Subject to covenants applicable to a related bond and the limitations of this section, payments required under an agreement for the exchange of interest rates by the related agency, or the State Treasurer on behalf of the related agency, may:
1. (a) Be treated as interest payments on the related bond;
2. (b) Be made from revenues or other moneys that are pledged or otherwise committed to pay the related bond; and
3. (c) Rank in an order of priority of payment relative to the payment of the related bond as the related agency, or the State Treasurer on behalf of the related agency, determines.
(3) In connection with entering into an agreement under this section, a related agency, or the State Treasurer on behalf of the related agency, may enter into a credit enhancement device for an agreement for exchange of interest rates.
(4) An agreement for exchange of interest rates is subject only to the limitations of this section and is not subject to a limitation applicable to the related bond.
(5) With the approval of the State Treasurer, a related agency may use moneys derived from the issuance and sale of bonds to pay termination payments due under an agreement entered into under this section.
(6) A related agency, with the approval of the State Treasurer, may:
1. (a) Create reserves to pay amounts due under an agreement for exchange of interest rates; and
2. (b) Fund the reserves with moneys derived from the issuance and sale of bonds or from revenues or other moneys described in subsection (2)(b) of this section.

[2007 c.783 §10]