Former CFC Chief Financial Officer Andrew Don brings a decades-long financial services career spanning Wall Street and international finance along with more than 20 years of progressive responsibility at CFC as he steps into the role of chief executive officer today.
Don first became aware of CFC from the other side of the table as a relationship manager for The Bank of Tokyo-Mitsubishi where he worked with the company under former CEO Chuck Gill and later Sheldon Petersen, who retired as of yesterday. Today, he’s the organization’s fourth chief.
“I enjoyed my 15 years of corporate banking experience as it provided an opportunity to acquire a significant knowledge base on the financial services industry and capital markets; however, I found the mission component lacking,” Don said. “When I had the opportunity to join CFC, I already knew the people and its mission. Once onboard, I quickly realized how unique the relationship is between CFC and its members.”
CFC’s 23-member board of directors, consisting of elected generation and transmission (G&T) and distribution cooperative CEOs and board members, guides CFC staff with the blueprint for defining its value proposition, outlining strategic initiatives and measuring success to ensure CFC continues to be its members’ most trusted financial resource.
“What makes CFC unique is our intimate knowledge of the utility sector and strong relationships across the country,” Don explained. “The most important way we maintain our relationships is listening to what members want and then developing the best solution. This is what differentiates CFC as a financial services provider to electric cooperatives.”
When Don joined CFC in 1999, he became one of the first employees with commercial banking experience. His background and training prepared him to refine CFC’s financial and credit risk policies, deliver new products and services and, over time, improve CFC’s financial metrics.
One of his early focus areas was reviewing and rewriting CFC’s loan policies to ensure the loan products were flexible, customizable and ready to meet members’ present and future financial needs.
The first CFC financial product he developed and launched was the U.S. Bank One Card program. Last year, more than 400 members earned a collective rebate of nearly $1.2 million. Members have earned collective rebates totaling more than $6.3 million since the program launched.
He also was instrumental in starting CFC’s syndicated financing capability. Today, CFC arranges syndicated financing on a case-by-case basis and acts as lead lender, arranger and administrative agent for syndicated facilities. Over the last 15 years, CFC has completed more than $25 billion of transactions in the syndicated loan market, ranging in size from $30 million to $1.2 billion.
“When we were working on the first syndicated transaction for which we were going to act as lead arranger, I called one of our relationship banks and asked what’s driving them now—credit quality or profitability,” Don shared. “Understanding the current market environment together with motivations, results in the ability to craft solutions with other financial institutions to ensure you get the best deal for CFC and our members.”
An example of a financial metric improvement is the successful effort over the last 12 years to grow member equity from $600 million in 2008 to $1.8 billion today. Member equity is important because it provides CFC with the capital strength to continue to provide loans to its members.
“Having a strong equity position, like we have today, translates to many member benefits,” Don explained. “It enables CFC to grow without needing members to buy certificates or equity as well as helps with the diversification of funds and supports financial risk management.”
Over the last 30 years, CFC has transformed from a program lender to a financial services provider and adviser as its capabilities advanced to meet the growing financial sophistication and changing credit needs of its members.
“G&Ts, and some larger distribution co-ops, require larger credit facilities and tend to have more complex financial needs, while certain other co-ops continue to rely on CFC’s value-added solutions, including KRTA, CFC Compass and CFC BudgetPro,” Don said. “At the end of the day, we want to provide the appropriate level of financial services and advice for all electric cooperatives, no matter their size or financial requirements.”
Two topics Don is paying close attention to are the evolving G&T and distribution cooperative relationships and how the COVID-19 pandemic accelerated investor and member consumer interest in Environmental, Social and Governance (ESG) trends.
“The power supply and distribution relationship is complex and requires a great deal of education to ensure co-ops make informed decisions that are in the best interest of their members,” Don explained. “Stranded assets, renewable resources, more flexible power supply arrangements and managing load with battery storage are all part of the same conversation that the CFC Board of Directors and I take very seriously.”
While a lot of focus is being placed on the environmental aspect of ESG, the electric cooperative business model is ideally suited to address the entire spectrum of ESG-related activities.
“A big part of the ESG framework is being able to communicate your cooperative’s story,” Don said. “The way our cooperatives communicate their principles and values can position them to be viewed as forward-thinking organizations. Co-ops do a tremendous amount of social good and are self-governed, so we need to be proactive and share our story.”
A tangible example of communicating an ESG principle was unveiled when CFC announced the successful issuance of its inaugural $400 million Sustainability Bond in October 2020. The bond’s proceeds will be used to finance member projects that provide access to broadband services for underserved and rural populations as well as to finance renewable energy projects.
“We wanted CFC to be a leader for the network and walk the talk when it comes to ESG,” Don said. “The Sustainability Bond is a great example of how you can align what’s good for CFC, our members and their communities.”
One of Don’s personal longstanding social causes is ThanksUSA. He serves on the board of the charitable organization dedicated to providing need-based college, technical and vocational school scholarships and pathways to employment for the spouses and children of America’s men and women in uniform. The charity has awarded nearly $16 million through 4,850 scholarships. Don received a bachelor’s degree from Dickinson College in Pennsylvania and an MBA from Fordham University.
In his free time, the new CEO enjoys group trips to hike and bike as well as golf. His most memorable hiking trip was a five-day trek around Mont Blanc that started in Italy, crossed through Switzerland and ended in France. He has been to 47 U.S. states and plans to visit the final three when he meets with members later this year.