CFC Leads $100M Syndication for Georgia Transmission

CFC and Georgia Transmission Corporation (GTC) closed a new $100 million, two-year unsecured syndicated term loan last November.

“The demand for electricity is growing nationwide, and Georgia is no exception,” GTC Director of Finance, Rates & Treasury Randall Barnes said. “To support this growth and continue to provide reliable power to our members, GTC’s investment in the grid continues to grow. Our primary funding source is the Rural Utilities Service (RUS), but from time to time we need to supplement our liquidity facilities to help bridge the timing gap between capital spend and RUS funding.”

The loan was syndicated with two of GTC’s existing banks, including CFC’s commitment of $60 million, of which $20 million was participated to Farmer Mac.

“This transaction helps us preserve the ability to use RUS funding in the future for spending happening today,” Barnes explained. “The funds are being used for general corporate purposes, but primarily in support of our capital program as we work to build the grid infrastructure necessary to ensure our members’ transmission needs are met.”

Barnes explained that the prolonged U.S. government shutdown last year impacted the availability of RUS funding, and the timing of the syndication helped them feel comfortable about their cash and debt positions as they neared the end of their fiscal year.

“GTC’s long partnership with CFC made the transaction seamless and successful,” Barnes said. “Our interests are aligned, so working with CFC is a natural fit for GTC.”

For cooperative financial leaders considering syndicated term loans, Barnes shared the following advice: “Think about how the proposed transaction fits within your long-term funding plans and work with banking partners you trust.”

Since 2005, CFC has completed more than $40.0 billion in syndicated loan transactions for electric cooperatives.

GTC is owned by Georgia’s 38 electric membership cooperatives and serves them by planning, building and maintaining high-voltage transmission lines and substations that carry power from generation facilities to the local cooperatives.