Financing Goal

TVA’s financing goal is to offer unique investment opportunities that provide exceptional value for both the investor and TVA.

Bond and Note Maturities

At September 30, 2005, TVA had 80 long-term debt issues outstanding of various final maturities, which totaled $20.6 billion. 

TVA had $2.5 billion in short-term discount notes outstanding at September 30, 2005.

			Discount Notes 11%
			<1 through 10 years 43%
			11 through 30 years 36%
			31 through 50 years 10%

Financing Structure

At September 30, 2005, TVA had $23.1 billion of bonds and notes outstanding, including short-term notes, electronotes^®, PARRS, VIPS and other Power Bonds. 

TVA also had $2.5 billion of other financing obligations
outstanding for total financing obligations of $25.6 billion.

			Other Long-Term Power Bonds 72%
			Other Financing Obligations 10%
			Short-Term Notes 10%
			electronotes® 4%
			Putable Automatic Rate Reset Securities (PARRS) 3%
			Valley Inflation-Indexed Power Securities (VIPS) 1%

Form and Denomination

* Market prices and broker policies may require investors to pay more or less than par value for a security in the secondary market. TVA does not guarantee the availability of any securities or the existence of any secondary markets. These pages do not include all information about TVA or its securities that is important for making investment decisions.

Key features of TVA bonds

Credit Ratings: TVA’s rated Power Bonds are rated Aaa by Moody’s Investors Service and AAA by Standard & Poor’s and Fitch Ratings.

Statutory Requirements: The TVA Act requires TVA to set power rates sufficient to pay, among other things, debt service on outstanding bonds.

First Pledge of Payment: Holders of TVA’s senior bonds and notes are given first pledge of payment from net power proceeds.

Purpose of Issuance: TVA may only issue securities to provide capital for its power program or to refund existing indebtedness.

State & Local Tax Exemption: Both the principal and interest on TVA securities are generally exempt from state and local income taxes.

Survivor’s Option: Some issues contain an option that allows for redemption at par value upon the death of the beneficial owner (subject to certain limitations).

TVA securities are backed solely by the net power proceeds of the TVA power system and are neither obligations of nor guaranteed by the U.S. Government.

General Inquiries

Ellen Robinson
Executive Vice President,
Communications and Government Relations

Tennessee Valley Authority
400 West Summit Hill Drive
Knoxville, TN 37902

Phone: 865-632-6263
Fax: 865-632-4760
Home Page: www.tva.com
E-mail: tvainfo@tva.com

Investor Inquiries

John M. Hoskins
Senior Vice President,
Treasurer/Investor Relations

Tennessee Valley Authority
400 West Summit Hill Drive
Knoxville, TN 37902

Web Site and E-mail Address
www.tva.com/finance
investor@tva.com

Phone/Fax Numbers
888-882-4975 (toll-free in the U.S.)
888-882-4967 (toll-free outside the U.S.)
Fax: 865-632-6673

Additional information
Please visit www.tva.com/finance for more details on TVA investment opportunities as well as offering circulars for specific securities, or call TVA’s Treasury organization toll-free at 888-882-4975. TVA does not sell securities directly to investors. TVA securities may generally be purchased through a broker, bank or other financial institution.

E-mail Alert

E-mail alerts are conveniently sent to a subscriber’s e-mail address whenever certain new information about TVA bonds is available. To learn more about how to subscribe to e-mail alerts, visit TVA’s web site at www.tva.com/finance

TVA is an equal opportunity and affirmative action employer. TVA also provides that the benefits of programs receiving TVA financial assistance are available to all eligible persons regardless of race, color, sex, national origin, religion, disability or age. This document can be made available in an alternate format upon request.

Description of TVA Securities

TVA’s electronotes® program is a retail bond program that offers bond issues in a variety of different structures targeted to individual investors. These bonds are generally issued in denominations of $1,000, with maturities ranging from one to 30 years.

Putable Automatic Rate Reset Securities (PARRS)
These bonds trade on the New York Stock Exchange under the symbols “TVC” and “TVE.” They were issued in denominations of $25 and pay interest quarterly. An annual reset provision provides for a possible reduction in the coupon rate under certain market conditions. If the rate is reset, the bond owner has the option to put (return) the bonds to TVA at par value.

Valley Inflation-Indexed Power Securities (VIPS)
These bonds are indexed to inflation as measured by the Consumer Price Index (CPI). Investors receive a fixed coupon rate, but the principal is adjusted for the changes in the CPI over time.

Discount Notes
These are short-term notes offered for sale on a continuing basis to investment dealers and dealer banks. Discount notes are sold at a discount, in book-entry form, in principal amounts of $100,000 and additional increments of $1,000.

Other TVA Power Bonds
TVA has both global and domestic bonds of varying maturities, structures, currencies, and interest payment frequencies.

Neither the 2005 Annual Report nor the 2005 Information Statement constitutes an offer to sell or a solicitation of an offer to buy any TVA securities.