KNOXVILLE, Tenn. — The Tennessee Valley Authority successfully completed a $1.25 billion bond offering Tuesday, issuing five-year global power bonds at 3.875% interest as part of an unprecedented capital raising campaign.
The latest offering marks TVA’s fifth major securities issuance in 12 months, bringing the federal power agency’s total long-term fundraising to $5.8 billion during that period. The proceeds will support the utility’s ambitious capital investment program and help retire existing debt obligations.
Financing Major Infrastructure Expansion
TVA Executive Vice President and CFO Tom Rice characterized the current period as among the most significant investment phases in the agency’s 90-year history. The funds raised will support infrastructure projects designed to accommodate regional economic growth while positioning the Southeast for America’s evolving energy landscape.
“We are financing one of the largest investment periods in TVA’s history,” Rice explained during the agency’s recent third-quarter earnings call. “These capital markets activities are essential to funding the transformative investments we’re making across our service territory.”
The bond offering attracted strong investor interest, according to TVA Vice President, Treasurer and Chief Risk Officer Brian Child. This represents the third billion-dollar-plus transaction TVA has completed in six months — a level of capital markets activity unseen by the utility in decades.
Bond Details and Market Reception
The new securities carry a maturity date of August 1, 2030, and cannot be redeemed early. Bondholders will receive interest payments twice yearly on February 1 and August 1. TVA has applied to list the bonds on the New York Stock Exchange.
Morgan Stanley, Bank of America Securities, JP Morgan, and TD Securities managed the transaction. The bonds will operate through the Federal Reserve’s book-entry system, with international settlement available via Clearstream and Euroclear. The securities carry CUSIP number 880591FE7 and ISIN number US880591FE74.
About TVA’s Operations
As the nation’s largest public power provider, TVA serves more than 10 million customers across seven southeastern states through one of America’s most diversified energy portfolios, spanning nuclear, hydroelectric, solar, natural gas, and emerging technologies.
The self-funding federal agency operates without annual congressional appropriations, generating revenue primarily through electricity sales. TVA maintains competitive pricing, with residential rates below 80% of the top 100 U.S. utilities and industrial rates lower than 90% of major utility competitors.
Beyond power generation, TVA manages flood control, river navigation, and land stewardship for the Tennessee River system while supporting regional economic development initiatives.