110 ILCS 405/5.1
The Board of Trustees may refund and refinance its outstanding bonds from time to time and to this end may authorize and issue refunding bonds secured and payable from the same source as the bonds being refunded thereby, whenever the Board of Trustees determines that it is in the best interests of the University to do so.
The refunding bonds may be issued in an amount not in excess of an amount to pay principal of the outstanding bonds to be refunded, plus the interest to accrue up to and including the maturity date or dates, or to the next succeeding date upon which such bonds are redeemable prior to maturity, plus the applicable redemption premiums, if any, and may bear interest at a rate not to exceed the greater of (i) the maximum rate authorized by the Bond Authorization Act, as amended at the time of the making of the contract, or (ii) 8% per annum for bonds issued before January 1, 1972 and at a rate not to exceed the maximum rate authorized by the Bond Authorization Act, as amended at the time of the making of the contract, for bonds issued after January 1, 1972, notwithstanding that the interest rate on the bonds to be refunded is less than the interest rate on the refunding bonds.
Any such refunding bonds shall be sold for not less than par and accrued interest to date of delivery thereof in such manner as the Board may determine.
The proceeds derived from the sale of any such refunding bonds shall be applied either to the payment or redemption and retirement of the bonds to be refunded, or if such bonds are not then subject to payment or redemption, all proceeds received at the sale thereof shall be invested in direct obligations of, or obligations the principal of and interest on which are fully guaranteed by, the United States of America so long as such investments will mature at such time with interest thereon or profit therefrom to provide funds adequate to pay, when due or called for redemption prior to maturity, the bonds to be refunded together with the interest accrued thereon and any redemption premium due thereon. Such proceeds or obligations of the United States of America shall, with all other funds legally available for such purpose, be deposited in escrow with any bank or trust company located and doing business in the State of Illinois with power to accept and execute trusts to be held in an irrevocable trust for the payment at maturity or redemption of the bonds refunded and accrued interest and the applicable premiums, if any, if the bonds are redeemable prior to maturity or upon earlier voluntary surrender with the consent of the holder thereof. The term "proceeds of the refunding bonds" means the gross proceeds after deducting therefrom all accrued interest. Any balance remaining in such escrow after the payment and retirement of the bonds to be refunded shall be returned to the Board of Trustees to be used as revenues pledged for the payment of such refunding bonds.
If any of the outstanding bonds to be refunded are to be paid prior to maturity pursuant to call for redemption exercised under a right of redemption reserved in such bonds, then at the time of the issuance of the refunding bonds, or prior thereto, a notice of redemption shall be given or irrevocable arrangements shall be made with a bank or trust company for the giving of notice of redemption as required by the proceedings applicable to the bonds to be refunded, and a copy of such notice signed by the appropriate officer shall be deposited with the bank or trust company for that purpose. If any officer signing the notice shall no longer be in the office at the time the notice is issued, the notice shall nevertheless be valid and effective to its intended purpose.
All of the provisions of this Act, including covenants that may be entered into in connection with the issuance of bonds, shall be applicable to the authorization and issuance of any refunding bonds.
With respect to instruments for the payment of money issued under this Section either before, on, or after the effective date of this amendatory Act of 1989, it is and always has been the intention of the General Assembly (i) that the Omnibus Bond Acts are and always have been supplementary grants of power to issue instruments in accordance with the Omnibus Bond Acts, regardless of any provision of this Act that may appear to be or to have been more restrictive than those Acts, (ii) that the provisions of this Section are not a limitation on the supplementary authority granted by the Omnibus Bond Acts, and (iii) that instruments issued under this Section within the supplementary authority granted by the Omnibus Bond Acts are not invalid because of any provision of this Act that may appear to be or to have been more restrictive than those Acts.
110 ILCS 405/5.1