XML 43 R18.htm IDEA: XBRL DOCUMENT v3.20.2
Debt and Other Obligations
9 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Debt and Other Obligations Debt and Other Obligations
Debt Outstanding

Total debt outstanding at June 30, 2020, and September 30, 2019, consisted of the following:
Debt Outstanding 
(in millions)
 At June 30, 2020At September 30, 2019
Short-term debt  
Short-term debt, net$777  $922  
Current maturities of power bonds issued at par(1)
1,917  1,030  
Current maturities of long-term debt of VIEs issued at par40  39  
Current maturities of notes payable—  23  
Total current debt outstanding, net2,734  2,014  
Long-term debt  
Long-term power bonds(2)
18,057  19,225  
Long-term debt of VIEs, net1,069  1,089  
Unamortized discounts, premiums, issue costs, and other(125) (131) 
Total long-term debt, net19,001  20,183  
Total debt outstanding$21,735  $22,197  
Notes
(1) Includes net exchange gain from currency transactions of $83 million at June 30, 2020. There were no such amounts at September 30, 2019.
(2) Includes net exchange gain from currency transactions of $101 million and $191 million at June 30, 2020, and September 30, 2019, respectively.

For the nine months ended June 30, 2020, long-term debt decreased primarily due to approximately $1.9 billion of power bonds maturing in 2021, offset by a $1.0 billion power bond issuance in May 2020. Short-term debt increased primarily due to power bonds maturing in 2021.
Debt Securities Activity

The table below summarizes the long-term debt securities activity for the period from October 1, 2019, to June 30, 2020:
Debt Securities Activity
 Date
Amount
(in millions)
Interest Rate
Issues(1)
2020 Series A Power BondsMay 2020$1,000  0.75 %
Discount on debt issues(3) 
Total long-term debt issues$997  
Redemptions/Maturities(2)
  
electronotes®
First Quarter 2020$217  3.33 %
electronotes®
Third Quarter 2020 2.65 %
2009 Series BDecember 2019 3.77 %
2018 Series AMarch 20201,000  2.25 %
1999 Series A PARRS (TVE)May 202023  3.36 %
1998 Series D PARRS (TVC)June 202017  3.55 %
2009 Series BJune 202027  3.77 %
Total redemptions/maturities of power bonds1,286  
Notes payable23  1.64 %
Debt of variable interest entities20  4.32 %
Total redemptions/maturities of debt$1,329  
Notes
(1) The 2020 Series A Power Bonds were issued at 99.7 percent of par.
(2) All redemptions were at 100 percent of par.

Credit Facility Agreements

        TVA has funding available under four long-term revolving credit facilities totaling $2.7 billion: a $150 million credit facility that matures on December 11, 2021, a $1.0 billion credit facility that matures on June 13, 2023, a $1.0 billion credit facility that matures on September 28, 2023, and a $500 million credit facility that matures on February 1, 2025. The interest rate on any borrowing under these facilities varies based on market factors and the rating of TVA's senior unsecured, long-term, non-credit-enhanced debt. TVA is required to pay an unused facility fee on the portion of the total $2.7 billion that TVA has not borrowed or committed under letters of credit. This fee, along with letter of credit fees, may fluctuate depending on the rating of TVA's senior unsecured, long-term, non-credit-enhanced debt. At June 30, 2020, and September 30, 2019, there were approximately $1.5 billion and $1.3 billion, respectively, of letters of credit outstanding under these facilities, and there were no borrowings outstanding. See Note 14 — Risk Management Activities and Derivative TransactionsOther Derivative InstrumentsCollateral.
The following table provides additional information regarding TVA's funding available under the four long-term revolving credit facilities:
Summary of Long-Term Credit Facilities
At June 30, 2020
(in millions)
Facility LimitLetters of Credit OutstandingCash BorrowingsAvailability
Maturity Date
December 2021$150  $38  $—  $112  
June 20231,000  522  —  478  
September 20231,000  450  —  550  
February 2025500  500  —  —  
Total$2,650  $1,510  $—  $1,140  
        
TVA and the U.S. Treasury, pursuant to the TVA Act, have entered into a memorandum of understanding under which the U.S. Treasury provides TVA with a $150 million credit facility. This credit facility was renewed in 2019 with a maturity date of September 30, 2020. Access to this credit facility or other similar financing arrangements with the U.S. Treasury has been available to TVA since the 1960s. TVA can borrow under the U.S. Treasury credit facility only if it cannot issue Bonds in the market on reasonable terms, and TVA considers the U.S. Treasury credit facility a secondary source of liquidity. The interest rate on any borrowing under this facility is based on the average rate on outstanding marketable obligations of the U.S. with maturities from date of issue of one year or less. There were no outstanding borrowings under the facility at June 30, 2020. The availability of this credit facility may be impacted by how the U.S. government addresses the possibility of approaching its debt limit.

Lease/Leasebacks
        
        TVA previously entered into leasing transactions to obtain third-party financing for 24 peaking combustion turbine units ("CTs") as well as certain qualified technological equipment and software ("QTE"). Due to TVA's continuing involvement with the combustion turbine facilities and the QTE during the leaseback term, TVA accounted for the lease proceeds as financing obligations. At June 30, 2020, and September 30, 2019, the outstanding leaseback obligations related to the remaining CTs and QTE were $223 million and $263 million, respectively. In March 2019, TVA made final rent payments under lease/leaseback transactions involving eight CTs, and TVA had previously acquired the equity interests related to these transactions. These transactions were terminated in July 2019. In May 2020, TVA made final rent payments under lease/leaseback transactions involving eight additional CTs, and TVA had previously acquired the equity interest related to these transactions. Rent payments under the remaining CT lease/leaseback transactions are scheduled to be made through January 2022. TVA does have the option to acquire the equity interests related to transactions involving the remaining eight CTs for additional amounts. In addition, on October 30, 2019, TVA provided notice of its intent to purchase the ownership interest in certain QTE. Repurchase payments are expected to be paid through a series of installments in 2021 and 2022, after which the associated leases will be terminated.