TVA Board Meeting - FY24 Financial plan and budget- Reso-Memo
Resolution #4
PROPOSED BOARD RESOLUTION (FY 24 Financial Shelf - Execution of Other Financing Arrangements)
RESOLVED, That the Board of Directors hereby authorizes TVA to enter into other financing arrangements in an amount that, when combined with the power bonds issued under the Supplemental Resolution entitled “FY 24 Financial Shelf – Issuance of up to $4,000,000,000 of Tennessee Valley Authority Power Bonds,” and the power bonds issued under the resolution of the Board of Directors entitled “FY 24 Financial Shelf – Reopening of Existing Power Bonds,” does not exceed $4,000,000,000, as long as on or prior to September 30, 2024, (1) the Audit, Finance, Risk, and Cybersecurity Committee (or successor committee) is notified of the arrangement and (2) both the Chief Executive Officer and the Chief Financial and Strategy Officer approve entering into the arrangement; RESOLVED further, That such other financing arrangements may include, but are not limited to, lease, lease-leaseback, lease-purchase, power purchase, and similar agreements involving new generation facilities or new assets that are substantially related, as well as electricity prepayments, which arrangements and related authorizations are described in more detail below:
Lease-Purchase Financing Arrangements
The lease-purchase financing arrangements may include, but are not limited to, transactions whereby TVA sells new generation facilities or portions thereof, or new assets that are substantially related to existing facilities, to third-party lessor(s) and TVA leases such assets from such third-party lessor(s) for a term upon the expiration of which such facility or asset may be returned to TVA; in connection with these arrangements, TVA may also enter into construction agreements pursuant to which TVA may agree to complete construction and start-up and test such facilities or assets for a fixed or capped price, or on a cost, cost-plus, or other basis, and by deadlines to be agreed under such agreements; the lease-purchase arrangements may also contain terms, conditions, and covenants related to the ownership, operation, and maintenance of such facility or assets as well as events of default and remedies during the term thereof; such lease-purchase arrangements may also include provisions related to early buyout, end-of-term purchase options, and termination purchase options upon the occurrence of various events at a price that may be pre-determined or may be the fair-market value or other value at such time as TVA may agree; TVA’s rent payments under such lease-purchase arrangements may be fixed or variable and may be in amounts sufficient to cover any debt service or equity returns of such third-party lessor(s); and
such lease-purchase arrangements may contain such other terms and conditions as may be appropriate for such transactions at such time;
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