(a) The authority is hereby authorized to provide for the issuance of revenue bonds or notes of the authority for the purposes of refunding any revenue bonds or notes of the authority then outstanding, including the payment of any redemption premium thereon and any interest accrued or to accrue to the earliest or any subsequent date of redemption, purchase or maturity of such revenue bonds or notes, and, if deemed advisable by the authority, for the additional purpose of making additional authority loans.

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(b) The proceeds of any such revenue bonds or notes issued for the purpose of refunding outstanding revenue bonds may, in the discretion of the authority, be applied to the purchase or retirement at maturity or redemption of such outstanding revenue bonds either on their earliest or any subsequent redemption date or upon the purchase or at the maturity thereof and may, pending such application, be placed in escrow to be applied to such purchase or retirement at maturity or redemption on such date as may be determined by the authority.

(c) Any such escrowed proceeds pending such use may be invested and reinvested in direct obligations of, or unconditionally guaranteed by, the United States, or in certificates of deposit or time deposits secured by direct obligations of, or unconditionally guaranteed by, the United States or in obligations of a state, territory or possession of the United States, or any political subdivision of any such state, territory or possession, or of the District of Columbia, within the meaning of Section 103(a) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, the full and timely payment of the principal of and interest on which are secured by an irrevocable deposit of direct obligations of the United States or which, if the outstanding bonds are then rated by a nationally recognized rating agency, are rated in the highest rating category by such rating agency, maturing at such time or times as shall be appropriate to assure the prompt payment, as to principal, interest and redemption premium, if any, of the outstanding revenue bonds to be so refunded. The interest, income and profits, if any, earned or realized on any such investment may also be applied to the payment of the outstanding revenue bonds to be so refunded. After the terms of the escrow have been fully satisfied and carried out, any balance of such proceeds and interest, income and profits, if any, earned or realized on the investments thereof may be returned to the authority for use by it in any lawful manner.

(d) The portion of the proceeds of any such revenue bonds or notes issued for the additional purpose of making additional authority loans may be invested and reinvested in direct obligations of, or unconditionally guaranteed by, the United States, and certificates of deposit or time deposits secured by direct obligations of, or unconditionally guaranteed by, the United States, or obligations of a state, territory or possession of the United States, or any political subdivision of any such state, territory or possession, or of the District of Columbia, within the meaning of Section 103(a) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, the full and timely payment of the principal of and interest on which are secured by an irrevocable deposit of direct obligations of the United States or which, if the outstanding bonds are then rated by a nationally recognized rating agency, are rated in the highest rating category by such rating agency, maturing not later than the time or times when such proceeds will be needed for the purpose of paying all or any part of such cost and any other investment described in section 10a-238. The interest, income and profits, if any, earned or realized on such investment may be applied to the payment of all or any part of such cost or may be used by the authority in any lawful manner.

(e) All such revenue bonds or notes shall be subject to the provisions of this chapter in the same manner and to the same extent as other revenue bonds issued pursuant to this chapter.