OIC Number: 2002 - 71

Date of Order: Mar 01, 2002

Statute: Municipal Finance Corporation Act Provincial Finance Act

OIC Text: A.

Whereas in and by clause 8(a), subsection 10(1) and

Section 12 of the Municipal Finance Corporation Act, being

Chapter 301 of the Revised Statutes of Nova Scotia, 1989, as amended, it is provided, among other things, as follows: 8 The Corporation may (

a) borrow or raise or secure the payment of money in such manner as the Board thinks fit by the issue and sale of notes, bonds, debentures or any other security; 10

(1) The notes, bonds, debentures and securities issued by the Corporation may be in such form and in such denomination, bear interest at such rate and be made payable as to principal, interest and premium, if any, at such time and at such place as the Board may determine. 12

(1) The repayment of the principal, interest and premium, if any, of any borrowings by, or any notes, bonds, debentures or securities issued by, the Corporation may be guaranteed by the Province and any such guarantees require the approval of the Governor in Council.

(2) The guarantee, in such form and manner as the Governor in Council may approve, may be endorsed upon any note, bond, debenture or security issued by the Corporation and may be signed on behalf of Her Majesty by the Minister of Finance or by such other person as the Governor in Council may designate.

(3) The signature of the Minister of Finance, or the person designated by the Governor in Council, upon the guarantee endorsed upon a note, bond, debenture or security of the Corporation may be engraved, lithographed or otherwise mechanically reproduced.

(4) The signature of the Minister of Finance, or the person designated by the Governor in Council, upon the guarantee is conclusive proof that the relevant provisions of this Act have been complied with. B. And

whereas subsections 59C(1) and (2), clauses 72(1)(

a) and (

b) and subsection 72(5) of the Provincial Finance Act, being

Chapter 365 of the said Revised Statutes, as amended, provide as follows: 59

(1) Notwithstanding any enactment or power or authority that authorizes the entering into of a financial obligation, directly or indirectly, by or on behalf of the Province, a department, government business enterprise or government service organization, the person authorized or empowered to enter into a financial obligation or to recommend to the Governor in Council the entering into of a financial obligation shall, instead of entering into the financial obligation or making a recommendation to the Governor in Council, forward the recommendation to the Minister setting out the terms and conditions of, the reasons for, and the request for an authorization for the financial obligation and, upon receipt of such recommendation, the Minister shall forward the recommendation to the Governor in Council with a report on the following: (

a) whether the cost of the proposed financial obligation is within the limits prescribed for financial obligations for the department, the government business enterprise or government service organization for the fiscal year; (

b) the effect of the proposed financial obligation on the financial statements of the Province for the current or a future fiscal year; (

c) whether the terms and conditions of the proposed financial obligation are reasonable and prudent for the purpose of avoiding undue risk of loss or obtaining a reasonable return; (

d) such other information as considered appropriate by the Governor in Council or the Minister.

(2) The Governor in Council may authorize the Minister to enter into a financial transaction referred to in subsection (1) or may authorize the person to enter into such financial transaction. 72

(1) A crown corporation shall have the legal power and capacity (

a) to borrow money in or out of Canada on its own credit; (

b) to issue its bonds, debentures or other securities and to sell or pledge the same; but no crown corporation shall incur any funded obligation without the approval of the Governor in Council, and the Governor in Council may from time to time by order in council make subject to its approval, or otherwise curtail, the exercise by all or any one or more crown corporations of any other power or capacity conferred by this subsection.

(5) The provisions of this

Section shall apply to every crown corporation, notwithstanding anything to the contrary contained in any other Act or in the memorandum, articles, letters patent, by-laws or other corporate charter or constitution of such corporation, but shall only apply to such corporation while it is a crown corporation. C. And

whereas the Nova Scotia Municipal Finance Corporation (the "Corporation") has determined that for the fiscal year 2002-2003, an amount not to exceed $80,000,000.00 in lawful money of Canada will be necessary to be raised by way of short and long-term borrowings for the purposes of the Corporation, at a term not to exceed 20 years, at an all in cost to the Corporation not to exceed 7.0%, and for long-term borrowings, using either a serial or bullet issue debenture (or combination thereof) depending on market conditions at the time of pricing the issue; D. And

whereas attached to and forming part of the Report and Recommendation is a certified copy of the Resolution of the Corporation respecting the anticipated short and long-term borrowing requirements of the Corporation for the fiscal year 2002-2003; E. And

whereas attached to as

Schedule "B"and forming part of the Report and Recommendation for this Order is a standard form of Debenture issued by the Corporation for long-term borrowings.

Now therefore, the Administrator, by and with the advice of the Executive Council, in and by virtue of

Chapter 301 of the Revised Statutes of Nova Scotia, 1989, as amended, the Municipal Finance Corporation Act,

Chapter 365 of the said Revised Statutes, as amended, the Provincial Finance Act, and of every other power and authority in him vested in this behalf, is pleased to order: 1. That the total net borrowing requirements of the Nova Scotia Municipal Finance Corporation for the fiscal year 2002-2003 in an amount not to exceed $80,000,000.00 in lawful money of Canada be and the same is hereby approved. For purposes of this approval, "total net borrowing" is defined as the gross borrowings of the Corporation in the fiscal year less repayments on the short-term borrowings in the fiscal year; 2.

That the raising or borrowing of the total net borrowing of up to $80,000,000.00 by the Corporation shall be by the issue and sale of its short-term and long-term Debentures, the long-term Debentures to be in substantially the form attached as

Schedule "B" to the Report and Recommendation, the Debentures shall be dated upon original issue, shall be issued on or before March 31, 2003 upon the usual terms and conditions included in the Debentures, shall be subject to a maximum twenty year term to maturity, and bear interest at an average rate not to exceed 7.0% in like currency, and with respect to long-term Debentures, interest shall be payable semi-annually in each year; 3.

That, in the event any of the long-term Debentures of the Corporation which are issued with a maturity date of twelve months or greater after the indebtedness evidenced by the Debenture was incurred, (referred to herein as "long-term Debentures") are not acquired by the Province upon issue, upon execution as authorized herein, the Province absolutely and unconditionally guarantees to the registered holders and any subsequent registered holders of the long-term Debentures, the payment, in the event of default by the Corporation, of the principal of the long-term Debentures and interest not exceeding the amount approved hereby, (the "Guarantee"), and that the Guarantee of the Province be appended or attached to or endorsed on each of the long-term Debentures and be signed manually by or with the engraved, lithographed or printed facsimile signature of the Minister of Finance or the Deputy Minister of Finance of the Province, and that every such facsimile signature shall have the same force and effect as though it were a manual signature, and that although the person whose signature or facsimile signature as Minister of Finance or the Deputy Minster of Finance is appended to the Guarantee be no longer in office at the date of the issuance of any of the long-term Debentures or on the date of their delivery, whether originally or in exchange or transfer, every such signature shall nevertheless be as fully effective and binding as though it were the manual signature of an authorized person in office at the date of issue of any of the long-term Debentures and at the date of delivery thereof. 4.

That the Guarantee for such long-term Debentures be substantially in the following form or to like effect: By virtue of the powers conferred by the Legislature of the Province of Nova Scotia and of an Order of the Lieutenant Governor in Council the Province of Nova Scotia hereby absolutely and unconditionally guarantees to the registered holder of the within Debenture the due and punctual payment, in the event of default in payment by Nova Scotia Municipal Finance Corporation, of the principal of the said Debenture and the interest thereon, as and when the same shall respectively become due and payable.

SIGNED ON BEHALF OF THE PROVINCE OF NOVA SCOTIA Deputy Minister of Finance 5. That the Minister of Finance or the Deputy Minister of Finance be and each of them is hereby authorized to execute and deliver on behalf of the Province such documents as either of them may consider necessary and approve by their signatures respecting the borrowing herein approved. 6.

That the foregoing approvals and guarantees are subject to the Corporation executing all corporate Resolutions necessary to effect any borrowing or to issue any Debenture and that any Resolution or Debenture be implemented within the limits as prescribed by this Order.

Department(s): Finance