The Tennessee Valley Authority on May 13 priced $1.5 billion of new 10-year maturity global power bonds, with an interest rate of 4.875% -- the agency’s largest bond transaction since 2011.
This is TVA’s fourth offering of new bonds and other long-term financings in less than a year.
Proceeds of the transaction will be used to support TVA’s capital investments and help refinance maturing debt.
“TVA is making some of the largest capital investments in our history to ensure the region has reliable, affordable energy to power American jobs,” said Tom Rice, TVA Senior Vice President and Chief Financial Officer. The transaction, "along with our recent offerings, are helping fund the generation assets that will ensure TVA continues to provide reliable, resilient energy today and for years to come.”
Morgan Stanley, Bank of America Securities, RBC Capital Markets, and TD Securities, served as joint managers for today’s transaction.
“We were pleased to see continued strong demand for the TVA name with today’s transaction, which is the largest for TVA in over a decade,” said Brian Child, TVA Vice President, Treasurer and Chief Risk Officer.
“Today’s offering attracted interest from a wide variety of domestic and global accounts, allowing us to upsize the transaction to $1.5 billion.”
The new bonds will mature on May 15, 2035, and are not subject to redemption prior to maturity. Interest will be paid semi-annually each November 15 and May 15. 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 880591FD9 (ISIN number US880591FD91).
TVA noted that it 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. Learn more at TVA.com.
