Debt and Guarantee Obligations

Debt Outstanding

Total debt outstanding at March 31, 2012, and September 30, 2011, consisted of the following:



Debt Outstanding
	At March 31, 2012			At September 30, 2011
Short-term debt
Discount notes (net of discount)	$	—		$	482
Current maturities of long-term debt of variable interest entities	12			—
Current maturities of power bonds	3,166			1,537
Total short-term debt, net	3,178			2,019
Long-term debt
Long-term debt of variable interest entities	988			—
Long-term power bonds	20,988			22,647
Unamortized discount, premiums and other	(235		)	(235		)
Total long-term debt, net	21,741			22,412
Total outstanding debt	$	24,919		$	24,431

Debt Securities Activity

The table below summarizes the long-term debt securities activity for the period from October 1, 2011, to March 31, 2012.



	Date	Amount		Interest Rate

Issues
Debt of variable interest entities	January 17, 2012	$	1,000	4.87	%
electronotes^®	Three Months Ended March 31, 2012	69		3.42	%
		$	1,069

Redemptions/Maturities
2009 Series A	November 2011	$	2	2.25	%
2009 Series B	December 2011	1		3.77	%
electronotes^®	Three Months Ended December 31, 2011	16		4.82	%
electronotes^®	Three Months Ended March 31, 2012	106		4.50	%
Total		$	125

Putable Automatic Rate Reset Securities. The interest rate on the 1998 Series D Putable Automatic Rate Reset Securities (“1998 Series D Bonds”) will be reset from 4.73 percent to 4.06 percent on June 1, 2012. The interest rate on the 1999 Series A Putable Automatic Rate Reset Securities (“1999 Series A Bonds”) was reset on May 1, 2012, from 4.50 percent to 4.15 percent. Because investors have the opportunity to redeem these securities in the event of a rate reset, and because the rates were expected to reset, TVA reclassified the outstanding principal balances of $330 million of the 1998 Series D Bonds and $274 million of 1999 Series A Bonds to current maturities of long-term debt at March 31, 2012. TVA redeemed $2 million of the 1999 Series A Bonds on May 1, 2012.

Power Bonds. The TVA Act authorizes TVA to issue Bonds in an amount not to exceed $30.0 billion outstanding at any time. Debt amounts outstanding include the effect of translations related to Bonds denominated in foreign currencies. TVA is reviewing how its energy prepayments are currently structured, with a view to determining by the end of 2012 whether a more conservative treatment of these instruments as Bonds is appropriate.

On April 15, 2012, TVA redeemed $1.0 billion of the 1992 Series D Bonds which had a coupon of 8.25 percent. The bonds were redeemed at 106 percent of par value with a premium of $60 million paid by TVA. The premium was accrued in Accounts payables and accrued liabilities at March 31, 2012, and deferred as a regulatory asset.

Secured Debt of VIEs. On January 17, 2012, JSCCG issued secured notes totaling $900 million in aggregate principal amount that bear interest at a rate of 4.626 percent. Also on January 17, 2012, Holdco issued secured notes totaling $100 million that bear interest at a rate of 7.1 percent. The JSCCG notes and the Holdco notes require amortizing semi-annual payments on each January 15 and July 15, and mature on January 15, 2042. The Holdco notes require a $10 million balloon payment upon maturity.

Approximately $970 million of the proceeds from the secured notes issuances were paid to TVA in accordance with the terms of the Head Lease and CMA. See Note 7. JSCCG deposited approximately $30 million with a lease indenture trustee to fund the payments due on July 15, 2012, in connection with the JSCCG notes and Holdco's membership interests in JSCCG. The deposit is reflected as Restricted cash of variable interest entity on the face of the consolidated balance sheets. TVA intends to use the proceeds from the transaction for the benefit of its power program.

Credit Facility Agreements. 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 matures on September 30, 2012, and is expected to be renewed. TVA plans to use the U.S. Treasury credit facility as 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 United States with maturities from date of issue of one year or less. There were no borrowings outstanding under the facility at March 31, 2012.

TVA also has funding available in the form of three long-term revolving credit facilities totaling $2.5 billion. The $0.5 billion and one of the $1.0 billion credit facilities both mature on January 14, 2014, and the other $1.0 billion credit facility matures on May 11, 2014. The credit facilities also accommodate the issuance of letters of credit. The interest rate on any borrowing under these facilities is variable 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 $2.5 billion which TVA has not borrowed or committed under letters of credit. This fee, along with letter of credit fees, fluctuates depending on the rating of TVA's senior unsecured long-term non-credit enhanced debt. At March 31, 2012, and September 30, 2011, there were $926 million and $575 million, respectively, of letters of credit outstanding under the facilities, and there were no borrowings outstanding. See Note 13 — Other Derivative Instruments — Collateral.

Guarantee Obligations

Energy Right^® Program Guarantee. TVA guarantees repayment on certain loans to end-use customers in association with the Residential Energy Right^® Program. These loans are originated by distributors and funded by a third party bank. As of March 31, 2012, total loans outstanding were approximately $182 million.