Ava Community Energy Financial, Administrative and Procurement Subcommittee
September 8, 2025

Credit Facility Renewal
Informational Review
Rusty Mills | September 8, 2025
2 Process for Obtaining the New Credit Facility
• Ava currently holds a $200MM credit facility with US Bank • Expires October 27, 2025
• Staff conducted a formal RFP to solicit offers to replace and expand the current credit facility
• Six proposals were received and scored based on flexibility, capacity and pricing • Additionally considered ESG goals, reference vetting, adherence to RFP details, and applied scoring methodology
• Bank Awarded – PNC Bank, based in Pittsburgh PA
• Ava is seeking to increase the facility to $300MM due to multiple risk factors • More volatile cash flow and operating conditions may stress working capital needs – higher capacity can further preserve financial strength and reserve balances • Stress testing shows potential for needing additional liquidity should market prices spike with weather, political conditions, or other systemic risk factors such as PCIA • Load Serving Entities (LSEs) have a risk of posting higher collateral because of market conditions—LOCs can protect reserves and working capital
3 New Credit Facility Terms
Certain aspects of the facility are still being negotiated by Staff, but some color on terms offered are as follows:
• Capacity is $300 million ($100mm increase)
• Undrawn Fee offered for any unused balance is 0.20%, which is 0.05% lower on the new facility — This is the cost to hold the facility as available • Standby LOCs have lower costs when issued 1.25% vs. 1.40% • Facility has a much lower Applicable Margin on draws 0.45% vs. 1.40% • Draws still based on Monthly Term Secured Overnight Financing Rate (SOFR) + the Applicable Margin, which as of September 1, 2025, is 4.70%. • Margin and fees can increase in the event S&P downgrades Ava’s “A” rating • Liquidity covenant in place of Debt Service Coverage covenant • Additional Bonds Test (ABT) has a DSC metric to meet if Ava issues Parity Debt, and no consent now needed.
4 Good Faith Estimates
• Good faith estimates have been provided by PFM Financial Advisors LLC in accordance with California Government Code Section 5852.1, requiring such presentation in a meeting open to the public
• Total maximum interest payment amount is $42,956,807, under the following assumptions:
▪ Maximum draw of $300,000,000 for the full term of the facility at a 1M SOFR+ 45bps of 4.70% (the rate as of 9/1/2022), while maintaining an “A” rating
• If $0 is drawn, then the total maximum fee and interest payments for the full term of the facility over three years would be $1,826,667
• If as much as $50MM is issued as LOCs, and no cash is drawn, then the total maximum interest payment for the full term of the facility over three years would be $3,425,000 Questions & Discussion
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