The Tennessee Valley Authority (TVA) priced its record-breaking $2 billion global bond issue June 14, placing approximately two-thirds of the issue with non-U.S. investors, including central banks, major money managers, insurance companies and pension funds.
“We are delighted to welcome these new investors to TVA,” said TVA Chairman Craven Crowell. “We are particularly pleased that they represent investors who have committed to our long-term strategies for success in a competitive market.”
The issue represents the largest global bond offering ever completed on behalf of a U.S. government agency. Although not predicted, TVA was able to take advantage of market conditions to convert outstanding debt at an average interest rate of 6.59% to the new 10-year rate of 6.46%, resulting in an annual interest savings of $2.6 million.