tva logoTennessee Valley Authority

TVA Achieves Historically Low Cost 30-Year Financing

December 19, 2012

KNOXVILLE, Tenn. — The Tennessee Valley Authority announced Wednesday that it has priced $1 billion of new 30-year global power bonds with an interest rate of 3.50 percent – the lowest rate ever on a TVA 30-year institutional bond.

TVA was able to take advantage of a window of opportunity during a period of government fiscal negotiations and the holiday season to obtain low-cost financing.

“The favorable interest rate environment and stable market allowed us to achieve the lowest interest rate on any TVA institutional financing of more than ten years,” Senior Vice President and Treasurer John Hoskins said. “The low-cost financing will support TVA’s vision to provide low cost, cleaner energy.”

TVA receives no funding from taxpayers, and pays its own way with revenues from power sales and power program financings. The proceeds from the sale will be used to reduce other debt, and for general corporate purposes.

The transaction benefitted from strong investor demand, with orders from a variety of institutional investors primarily in the United States Morgan Stanley, Bank of America Merrill Lynch and Barclays Capital were joint book-running managers for the offering.

“We were pleased to be able to meet investor demand for high-quality, long-term bonds, with an oversubscribed book of orders that supported the historically low interest rate,” said Hoskins.

The new bonds mature on Dec. 15, 2042, and are not subject to redemption prior to maturity. Interest will be paid semi-annually each Dec.15 and June 15. Application has been made to list the bonds on the New York Stock Exchange. The bonds will also be issued, maintained and transferred through the book-entry system of the Federal Reserve Banks. The bonds can be identified by the CUSIP number 880591EP3.

TVA provides electricity for utility and business customers in most of Tennessee and parts of Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia to a population of over 9 million people.

Media Contact

Duncan Mansfield, Knoxville, (865) 632-4660
TVA Public Relations, Knoxville, (865) 632-6000

www.tva.com/news

Investor Relations Contact

Ann Storberg, Knoxville, (865) 632-4425 or (888) 882-4975

www.tva.com/finance

 

           
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