TVA Board Meeting - FY24 Financial plan and budget- Reso-Memo
Board of Directors Page 2 August 18, 2023
involving new generation facilities or new assets that are substantially related to existing facilities. Because developing and executing otherfinancing arrangements can involve significant periods of time, TVA may not complete all of these arrangements by the end of the fiscal year in which they were initiated; however, as long as all of the steps described in the Oversight Reports section of this memorandum have been completed with respect to an arrangement by September 30, 2024, TVA may complete such an arrangement after September 30, 2024. The related resolution provides additional details regarding the various types of other financing transactions that TVA could consider and is designed to be broad enough to provide TVA the flexibility to enter into the various types of other financing transactions as needed from time to time, and yet specific enough to clearly authorize the many various arrangements that TVA would need to enter into to complete such transactions. Under certain conditions, TVA may elect to hedge interest rate risk or currency exchange rate risk associated with the issuance of power bonds orthe execution of other financing arrangements. These hedges would be entered into during fiscal year 2024 but may be utilized in connection with transactions that are completed after fiscal year 2024.
ALTERNATIVES CONSIDERED
Board approval for power bond issuances and other financing arrangements could be obtained on a case-by-case basis or in the recommended shelf format that covers TVA’s expected needs through the end of fiscal year 2024. Periods of up to three months typically elapse between Board meetings, and financial markets can be volatile. The shelf format provides the flexibility for TVA to issue power bonds and enter into other financing arrangements when financial market conditions are favorable for TVA.
RECOMMENDED ACTION AND POTENTIAL IMPACTS
The CFSO is asking the Board to approve this memorandum’s four companion resolutions.
OVERSIGHT REPORTS
Notification of the Audit, Finance, Risk, and Cybersecurity Committee (or successor committee), as well as the agreement of both the Chief Executive Officer and CFSO, would be obtained for the issuance of new power bonds, the issuance of an additional installment of existing power bonds, the execution of other financing arrangements, or the execution of interest rate or currency exchange rate hedges in connection with the issuance of power bonds or the execution of other financing arrangements.
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