3 Colo. Code Regs. § 704-2-59-8.5
Current through Register Vol. 47, No. 20, October 25, 2024
Section 3 CCR 704-2-59-8.5 - Additional securityUpon review of an application for such registration, if, in the opinion of the Securities Commissioner, the success of the project is dependent upon third parties building or developing improvements in the district, such third party builder or developer may be required to furnish security in the form of:
A. One or more unconditional, irrevocable letters of credit or guarantees from depository institutions or such other persons, companies or institutions in a stated amount at least equal to the principal amount of the bonds plus six months interest thereon; orB. Escrow deposits of cash in an amount at least equal to the principal amount of the bonds plus six months interest thereon held by a third-party custodian. Appropriate action shall be taken to create a perfected security interest in the cash, and the cash must be held in such a manner that it will not be subject to an avoidable preference under the United States Bankruptcy Code in the event of a bankruptcy of the builder or developer; orC. Escrow deposits of direct and general obligations of the United States of America the payment of which the full faith and credit of the United States of America is irrevocably and unconditionally pledged, in an amount at least equal to 105% of the principal amount of the bonds plus six months interest thereon held by a third-party custodian. Appropriate action shall be taken to create a perfected security interest in the securities and the securities must be held in such a manner that they will not be subject to an avoidable preference under the United States Bankruptcy Code in the event of a bankruptcy of the builder or developer; orD. First lien mortgages, equal to at least 300% of the principal amount of the bonds plus six months interest thereon, on land owned by the developers or builders together with an appraisal of the land dated no earlier than 30 days prior to the issue date for the bonds indicating the land has a value in excess of mortgage; orE. Other comparable security satisfactory under the circumstances to the Securities Commissioner.