The Tennessee Valley Authority priced $1.25 billion of new five-year maturity global power bonds on Aug. 5, 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 the 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.
