Code of Alabama - Title 11: Counties and Municipal Corporations - Section 11-57-15 - Bonds - Security for payment of principal and interest

Section 11-57-15 - Bonds - Security for payment of principal and interest.

The principal of and the interest on the bonds shall be secured by a pledge of the revenues out of which the bonds shall be made payable by an assignment or pledge of the lease agreement covering the project from which revenues so pledged shall be derived and by a pledge of the rental from such project and may be secured by a nonforeclosable indenture covering the project.

The trustee under any indenture may be a trust company or bank having trust powers, whether located within or without the state. The indenture may contain any agreements and provisions customarily contained in instruments securing evidences of indebtedness, including, without limiting the generality of the foregoing, provisions respecting the collection, segregation and application of the rental from any project covered by such indenture, the terms to be incorporated in the lease agreement respecting the project, the maintenance and insurance of the project, the creation and maintenance of special funds from the rental of the project and the rights and remedies available in the event of default to the holders of the bonds or the trustee under the indenture as the board shall deem advisable and shall not be in conflict with the provisions of this chapter; provided, that in making any such agreements or provisions the authority shall not have the power to obligate itself except with respect to the project and the application of the revenues therefrom. The indenture may contain provisions regarding the rights of any trustee thereunder and the holders of the bonds and coupons and may contain provisions restricting the individual rights of action of the holders of the bonds and coupons.

(Acts 1961, No. 895, p. 1407, §14; Acts 1961, Ex. Sess., No. 289, p. 2335, §14.)

Last modified: May 3, 2021