Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 137

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 8
Chunk 137
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2025, the gross derivative asset and gross derivative liability was $28 million and $85 million, respectively, with offsetting amounts for each totaling $20 million.  At September 30, 2024, the gross derivative asset and gross derivative liability were $4 million and $165 million, respectively, with offsetting amounts for each totaling $4 million.(3)  Letters of credit of approximately $442 million and $535 million were posted as collateral at September 30, 2025 and 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 InstrumentsInvestment Fund Derivatives.  Investment funds consist primarily of funds held in the NDT, ART, SERP, DCP, and RP.  See Note 17 — 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 September 30, 2025 and 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 September 30, 2025 and 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 September 30, 2025, the aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a liability position was $884 million.  TVA's collateral obligations at September 30, 2025, under these arrangements were $456 million, for which TVA had posted $442 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