1-16A-89. Credit enhancement obligation--Conditions. No credit enhancement obligation is valid unless the authority adopts a resolution which finds and determines the following:

(1) The bonds or other obligations to be secured by such credit enhancement obligation are to be issued for the purpose of financing or refinancing property, real or personal, or related costs incurred by a health institution which owns or operates a hospital which presently provides or intends to provide hospital services to all or a portion of the residents of the municipality or county which is proposing to issue the credit enhancement obligation;

(2) The participating health institution which is obligated to make payments in amounts and at the times required to repay the bonds or other obligations to be secured by the credit enhancement obligation are reasonably expected to have sufficient funds available for such purposes;

(3) The credit enhancement obligation and any bonds or other obligations to be issued by the authority, municipality or county in connection therewith do not contain provisions which will require credit enhancement obligation payments by the municipality or county in any fiscal year of the municipality or county prior to the year in which a principal payment, sinking fund installment or comparable redemption payment amount is otherwise scheduled to become due; and

(4) If deemed advisable by the authority, the participating health institution shall agree to one or more financial or operational covenants which, if not complied with, may result in the authority or a financial institution requiring the participating health institution to take certain actions including, without limitation, the retaining of an independent consultant to study the operations of the participating health institution and recommend improvements therein.Source: SL 1992, ch 3, § 2.