TVA Prices $1 Billion of 5-Year Global Power Bonds

KNOXVILLE, Tenn., Sept. 25, 2013 /PRNewswire/ -- The Tennessee Valley Authority announced Wednesday that it has priced $1 billion of new 5-year global power bonds with an interest rate of 1.75 percent.

(Logo: http://photos.prnewswire.com/prnh/20100304/TVALOGO)

The bonds were priced at a yield of 1.85 percent, representing a spread of 43 basis points (0.43 percent) over 5-year maturity U.S. Treasury bonds. 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 5-year maturity fits well in TVA's financing portfolio, and this is a maturity that we have not accessed in quite some time," TVA Chief Financial Officer John Thomas said. "We were pleased to be able to take advantage of sound market conditions to secure low-cost funding that helps TVA keep power rates low for our customers."

Investors included a wide variety of domestic and global institutions, including official institutions, state and local governments, pension funds, money managers and insurance companies.  BofA Merrill Lynch, Barclays, Morgan Stanley and TD Securities were joint book-running managers for the offering.  

"We were pleased to see strong demand for the TVA name from the wide variety of investors that participated," TVA Vice President and Treasurer Tammy Wilson said. "Our focus on investor outreach helped to drive demand and lower cost for TVA."

The new bonds mature on Oct. 15, 2018, and are not subject to redemption prior to maturity.  Interest will be paid semi-annually each April 15 and Oct. 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 880591EQ1.

The Tennessee Valley Authority is a corporate agency of the United States that provides electricity for business customers and local power distributors serving 9 million people in parts of seven southeastern states. TVA also 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.

Follow TVA news on Facebook and Twitter, www.tva.com/news, www.tva.com/

SOURCE Tennessee Valley Authority



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