TVA Prices $1 Billion Power Bond
July 29, 2003
TVA has priced a $1 billion, 10-year global power bond at a coupon rate of 4.75 percent.
The bonds mature on August 1, 2013, are non-callable and will pay interest semiannually.
“TVA bonds are attracting foreign and domestic investors who want to diversify their holdings with safe, high-quality securities in a volatile market,” said TVA Chairman Glenn McCullough Jr. “This bond offering provides TVA with a cost of money that is historically very attractive for a 10-year financing and enhances our ability to provide affordable, reliable power to the people of the Tennessee Valley.”
TVA expects the bonds to be rated Aaa by Moody’s Investors Service and AAA by Standard and Poor’s. The semiannual interest payments will be made on February 1 and August 1.
Citigroup and Morgan Stanley are the joint lead managers for the sale. Co-managers are the Bank of America, Bear Stearns, Tokyo-Mitsubishi Inc. and Williams Capital.
“TVA is reducing its exposure to interest rate risk in a time of rising rates by locking in a long-term rate under 5 percent,” said TVA Chief Financial Officer Michael E. Rescoe. “This financing allows TVA to actively manage inherent interest rate risk into the future.”
TVA is a wholly owned federal corporation and the nation’s largest public power system. Its power system is self-supporting through power revenues and proceeds from the issuance of debt. TVA provides power to large industries and 158 power distributors that serve 8.3 million consumers in seven southeastern states.
Media Contact:
John Moulton, Knoxville (865-632-8048) or TVA News Bureau, Knoxville (865-632-6000)
