TVA Prices $500 Million of 30-Year Global Power Bonds

June 18, 2008

TVA has priced $500 million of global power bonds with a coupon rate of 5.5 percent. The bonds mature on June 15, 2038.

 Barclays Capital and Morgan Stanley are joint book-running managers for the transaction. Banc of America Securities, Deutsche Bank Securities, Lehman Brothers and Merrill Lynch, are co-managers. Proceeds from the sale will be used by TVA to refinance existing debt.

Investors that purchased the bonds include money managers, insurance companies, pension funds and institutions that typically have a need for highly rated investments.

“We were pleased to see widespread demand for these bonds,” said TVA Senior Vice President and Treasurer John Hoskins. “Participation from several overseas accounts and new investors was particularly encouraging.”

Attractive interest rates, which remain historically low, and calmer market conditions at the beginning of this week contributed to the success of the transaction, according to Hoskins. “This financing will benefit TVA and its power customers by helping to control TVA’s interest expense for years to come,” he said.

The bonds are expected to be rated “Aaa” by Moody’s Investors Service and “AAA” by Fitch Ratings and Standard and Poor’s. Interest will be paid semi-annually December 15 and June 15, and the first interest payment will be made in December 2008. The bonds are not subject to redemption prior to maturity.

TVA is applying 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 880591ED0.

TVA is the nation’s largest public power provider and is completely self-financing. TVA provides power to large industries and 159 power distributors that serve approximately 8.8 million consumers in seven southeastern states. TVA also manages the Tennessee River and its tributaries to provide multiple benefits, including flood damage reduction, navigation, water quality and recreation.

Media Contact

John Moulton, Knoxville, (865) 632-8048
TVA News Bureau, Knoxville, (865) 632-6000

TVA Newsroom

Investor Contact

TVA Investor Relations (toll-free), Knoxville, (888) 882-4975
TVA Investor Relations (toll-free International), (888) 882-4967
www.tva.com/finance