TVA Board Meeting - FY24 Financial plan and budget- Reso-Memo
Attachment 8
August 18, 2023 Financial Services
Board of Directors
SUBJECT
The Executive Vice President and Chief Financial and Strategy Officer (CFSO) recommends that the Board authorize TVA to issue power bonds and enter into other financing arrangements in an aggregate amount not to exceed $4,000,000,000 during fiscal year 2024 by approving: ∑ A proposed supplemental resolution authorizing the issuance of up to $4,000,000,000 in power bondsin fiscal year 2024 (Resolution #1), ∑ Proposed Board resolutions that would, after completion of the steps described in the Oversight Reports section of this memorandum: ¸ Approve the amendment of any previouslyissued supplemental resolution to permit the issuance of an additional installment of power bonds under such supplemental resolution (Resolution #2), ¸ Authorize senior TVA officersto issue power bonds and to hedgeinterest rate risk and currency exchange rate risk associated with the issuance of such power bonds (Resolution #3), and ¸ Authorize senior TVA officersto enter into other financing arrangements and to hedge interest rate risk and currency exchange rate risk associated with such other financing arrangements (Resolution #4).
BACKGROUND
To support the financing of its power program, TVA regularly issues long-term power bonds. From time to time, in order to provide optimal flexibility in the management of its financing program,TVA also enters into other financing arrangements. TVA anticipates issuing power bonds and entering into other financing arrangements in an aggregate amount of up to $4,000,000,000 during fiscal year 2024. The proceeds from these transactions would be used for power system purposes, such as meeting funding needs for new capital expenditures and refinancing existing debt. Board approval of the issuance of power bonds is required by the Basic Tennessee Valley Authority Power Bond Resolution. The power bonds may be issued as a new series of power bonds or as an additional installment to a previously issued series of power bonds. In addition to issuing power bonds, TVA may enter into otherfinancing arrangements in order to provide optimal flexibility in the management of TVA’s power program. These other financing arrangements may include, but are not limited to, lease and lease-purchase agreements
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