TVA Prices $500 Million of New 30-Year Bonds

Key Points - 

• TVA has priced $500 million of new 30-year maturity global power bonds carrying an interest rate of 4.25%, which locks in historically low-cost funding.
• The rate on the new bonds ties as the second lowest ever for a TVA bond 30-years or longer.
• This is TVA's first 30-year bond offering since 2012.   

KNOXVILLE, Tenn., Sept. 9, 2022 /PRNewswire/ --The Tennessee Valley Authority priced $500 million of new 30-year maturity global power bonds today, with an interest rate of 4.25 percent. Today's offering marked TVA's first 30-year bond since 2012, and the 4.25 percent rate is tied as the second lowest ever for a TVA bond of 30 years or longer in maturity. 

Despite an increase in interest rates in the first half of the year, long-term rates remain at historically low levels, creating an opportunity for TVA to secure long-term funding at attractive levels.

"We were pleased to see a window of stability develop in recent weeks, and an opportunity for TVA to take advantage of still historically low long-term rates," said TVA's Treasurer and Chief Risk Officer, Tammy Wilson. "With one of the nation's largest electric power systems, TVA is a natural issuer of longer-maturity bonds, and the success of this transaction shows the confidence investors have in TVA and the strength of the public power model."

Strong demand for high quality investments of longer duration contributed to the success of the offering.  The bonds drew interest from a variety of investors including asset managers, pension funds, and insurance companies, among others. 

"The new 30-year bond fits well in TVA's debt profile, which has a low number of bonds maturing in the early 2050s.  TVA debt levels remain at the lowest levels in over 30 years, and the new bonds will help TVA maintain stable interest costs for decades to come," added Wilson.

Bank of America, Morgan Stanley, RBC Capital Markets, and TD Securities served as joint book-running managers for the transaction. The proceeds of the bonds will be used to refinance existing debt and for general power system purposes. The new bonds will mature on September 15, 2052, and are not subject to redemption prior to maturity. Interest will be paid semi-annually each March 15 and September 15. 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 880591EY4 (ISIN number US880591EY48).

The Tennessee Valley Authority is a corporate agency of the United States that provides electricity for business customers and local power companies serving nearly 10 million people in parts of seven southeastern states. TVA receives no taxpayer funding, deriving virtually all of its revenues from sales of electricity. In addition to operating and investing its revenues in its electric system, 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.

Media Contact:Jim Hopson, Knoxville, 865-632-8860TVA Media Relations, Knoxville, 865-632-6000www.tva.com/newsFollow TVA news on Facebook and Twitter

Investor Relations:Tammy Wilson, Knoxville, 865-632-3366 or 888-882-4975Josh Carlon, Knoxville, 865-632-4133 or 888-882-4975http://www.tva.com/investors

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SOURCE Tennessee Valley Authority