The Tennessee Valley Authority priced $1.25 billion of new 5-year maturity global power bonds today, with an interest rate of 3.875%. This is TVA’s fifth offering of new bonds and other long-term securities within the past year, which has seen TVA raise $5.8 billion in long-term funding. Proceeds of today’s transaction will be used to support TVA’s capital investments and help refinance maturing debt.
“As I outlined on TVA’s recent third quarter conference call, we are financing one of the largest investment periods in TVA’s history,” said Tom Rice, TVA’s Executive Vice President and Chief Financial Officer. “Today’s transaction, and other recent offerings, are helping fund the significant investments that TVA is making to support our region’s growth and build America’s energy future.”
Morgan Stanley, Bank of America Securities, JP Morgan, and TD Securities, served as joint managers for today’s transaction.
“We were pleased to see strong demand for today’s transaction,” said Brian Child, TVA’s Vice President, Treasurer and Chief Risk Officer. “This is TVA’s third transaction larger than $1 billion in the past six months – we have not been this active in the new issue markets in decades, and the great reception is helping us finance TVA’s capital needs at the most favorable interest rates.”
The new bonds will mature on August 1, 2030, and are not subject to redemption prior to maturity. Interest will be paid semi-annually each February 1 and August 1. An application has been made to list the bonds on the New York Stock Exchange.
The bonds will be issued, maintained, and transferred through the book-entry system of the Federal Reserve Banks. Transactions may be cleared and settled by international participants through Clearstream and Euroclear. The bonds can be identified by the CUSIP number 880591FE7 (ISIN number US880591FE74).
The Tennessee Valley Authority is the nation’s largest public power supplier, delivering energy to more than 10 million people across seven southeastern states. TVA has one of the most diverse energy systems – including nuclear, hydro, solar, gas, and advanced technologies. To prepare for the future, TVA is making significant investments in its power system toward new generation and transmission.
TVA is a self-supporting corporate agency of the United States, receiving no annual federal appropriations and deriving virtually all of its revenues from sales of electricity. TVA maintains some of the lowest energy costs and highest reliability in the nation. TVA’s residential rates are lower than those paid by over 80% of customers of the top 100 U.S. utilities and industrial rates are lower than those paid by over 90% of customers of the top 100 U.S. utilities. In addition, TVA provides flood control, navigation, and land management for the Tennessee River system, and assists local power companies and state and local governments with economic development and job creation.