Company: TVC
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001376986-25-000029
Chunk: 121

Company: Tennessee Valley Authority
Filing Date: 2025-05-01
Form: 10-Q
Item: Part II, Item 3
Chunk 121
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 were $4 million and $165 million, respectively, with offsetting amounts for each totaling $4 million.(3)  Letters of credit of $465 million and $535 million were posted as collateral at March 31, 2025, and September 30, 2024, respectively, to partially secure the liability positions of one of the interest rate swaps in accordance with the collateral requirements for this derivative.Other Derivative Instruments Investment Fund Derivatives.  Investment funds consist primarily of funds held in the Nuclear Decommissioning Trust ("NDT"), the Asset Retirement Trust ("ART"), the Supplemental Executive Retirement Plan ("SERP"), the TVA Deferred Compensation Plan ("DCP"), and the Restoration Plan ("RP").  See Note 15 — Fair Value Measurements — Investment Funds for a discussion of the trusts, plans, and types of investments.  The NDT and ART may invest in derivative instruments which may include swaps, futures, options, forwards, and other instruments.  At March 31, 2025, and September 30, 2024, the NDT held investments in forward contracts to purchase debt securities.  The fair values of these derivatives were in net asset positions totaling $16 million and $11 million at March 31, 2025, and September 30, 2024, respectively. Collateral.  TVA's interest rate swaps, currency swaps, and commodity derivatives under the FHP contain contract provisions that require a party to post collateral (in a form such as cash or a letter of credit) when the party's liability balance under the agreement exceeds a certain threshold.  At March 31, 2025, the aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a liability position was $862 million.  TVA's collateral obligations at March 31, 2025, under these arrangements were $462 million, for which TVA had posted $465 million in letters of credit.  These letters of credit reduce the available balance under the related credit facilities.  TVA's assessment of the risk of its nonperformance includes a reduction in its exposure under the interest rate swap contracts as a result of this posted collateral.  For all of its derivative instruments with credit-risk related contingent features:    •If TVA remains a majority-owned U.S. government entity but S&P Global Ratings ("S&P") or Moody's Investors Service, Inc. ("Moody's") downgrades TVA