July (pdf) - New York Power Authority

and such pledge shall be subordinate in all respects to the pledge created by the General Resolution as
security for payment of the Obligations, including the 2011 Bonds. As of the date of this Official
Statement, the Subordinated Indebtedness issued by the Authority and outstanding consists of the CP Notes
and the EMCP Notes (see ‘‘PART 2—CERTAIN FINANCIAL AND OPERATING MATTERS—
Outstanding Indebtedness’’). For a discussion of debt the Authority expects to issue in the period 2011-
2015, see ‘‘PART 2—CERTAIN FINANCIAL AND OPERATING MATTERS—Projected Capital and
Financing Requirements.’’
The Authority may also incur Parity Debt payable and secured on a parity with Obligations,
including the 2011 Bonds. Parity Debt currently consists of the ART Notes, notes issued under a revolving
credit agreement providing liquidity support for the ART Notes (such notes having no amounts currently
outstanding), and the scheduled payments to be made under several interest-rate swap agreements entered
into by the Authority, as discussed below. Parity Debt may also be incurred in connection with, among other
things, Credit Facilities, Qualified Swaps and certain take-or-pay fuel or power contracts (see ‘‘PART 2—
APPENDIX 1—SUMMARY OF CERTAIN PROVISIONS OF THE GENERAL RESOLUTION—
Credit Facilities; Qualified Swaps and Other Similar Arrangements; Parity Debt’’).
In 1998, the Authority entered into several forward floating-to-fixed interest-rate swap agreements
(collectively, the ‘‘1998 Swap Agreements’’) in connection with proposed future bond issues, of which a
notional amount of approximately $81,815,000 remains outstanding. Pursuant to the General Resolution,
payments to the counterparties relating to regularly scheduled payments under the 1998 Swap Agreements
are on a parity with the principal and interest payments on the Obligations, including the 2011 Bonds, and the
payment of any termination, or other fees, expenses, indemnification or other obligations to the
counterparties under such 1998 Swap Agreements are payable as Subordinated Contract Obligations.
The Authority entered into a ten-year floating-to-fixed interest rate swap agreement which
commenced in September 2006 relating to its ART Notes (the ‘‘ART Notes Swap Agreement’’), having an
initial notional amount of approximately $156 million, of which $122,935,000 is currently outstanding, and
which declines over the term of the agreement to approximately $75 million. The ART Notes Swap
Agreement and the payments relating to any termination or other fees, expenses, indemnification or other
obligations to the counterparty under such agreement are subordinate to the Obligations, including the 2011
Bonds. See the Authority’s financial statements for the year ended December 31, 2010, Note 8, for further
discussion of these interest rate swap agreements.
In connection with future or outstanding debt, the Authority may enter into additional interest rate swap
agreements, either of the fixed-to-floating rate or floating-to-fixed rate variety, which may also include
forward swaps (see ‘‘PART 2—CERTAIN FINANCIAL AND OPERATING MATTERS— Outstanding
Indebtedness’’). The regularly scheduled payments under any such swap agreements could be either on a
parity with the Obligations, including the 2011 Bonds, or subordinate to the Obligations, including the 2011
Bonds, as determined by the Authority. The payments relating to any termination or other fees, expenses,
indemnification or other obligations to the counterparties under such swap agreements would be
subordinate to the Obligations, including the 2011 Bonds.
The General Resolution also permits the Authority to issue bonds, notes, or any other obligations under
another and separate resolution to finance a Separately Financed Project.
For a discussion of energy swap agreements entered into by the Authority, see the Authority’s
financial statements for the year ended December 31, 2010, Note 8.
General
The Authority has no taxing power and its obligations are not debts of the State or of any political
subdivision of the State, other than the Authority. The 2011 Bonds will not constitute a pledge of the faith and
credit of the State or of any political subdivision thereof, other than the Authority. The issuance of the 2011
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