TVA Prices $1 Billion of New Five-Year Global Power Bonds

by Paul Ciampoli
APPA News Director
March 31, 2023

The Tennessee Valley Authority priced $1 billion of new five-year maturity global power bonds on March 27, with an interest rate of 3.875%.  This is TVA’s first bond offering with a five-year maturity since 2020. 

TVA said the bonds attracted interest from a wide variety of domestic and global institutions, including official institutions, state and local governments, pension funds, money managers and insurance companies. Barclays Capital, BofA Securities, Morgan Stanley & Co, and RBC Capital Markets served as joint book-running managers for the transaction.

The new bonds will mature on March 15, 2028, 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.

TVA plans to use the proceeds to pay down other debt and for general corporate purposes.  The transaction will not, in and of itself, materially change TVA’s debt balance, which remains at the lowest level in 30 years. TVA’s business plan calls for debt to increase in fiscal year 2023, and in the coming years, as TVA continues to invest in its power system.