TVA prices inaugural green bond offering of USD 500m

The Tennessee Valley Authority (TVA), a US corporate agency that delivers electricity for business customers and local power companies, on Monday announced and priced a USD-500-million (EUR 423m) offering of 10-year green bonds.

TVA said that this is its inaugural offering of a sustainability-focused financial instrument and that the bonds carry a coupon interest rate of 1.500%, which is record-low for the agency. The offering has attracted more than USD 2 billion in initial orders from money managers, state governments, insurance companies, and others.

The agency will use the bonds to finance ongoing capital investments that will help meet the goals of its Strategic Intent and Guiding Principles document. Proceeds will be spent on renewable energy generation, energy storage, transmission system upgrades and the development of advanced clean energy technologies. More specifically, TVA has identified a solar project in northern Alabama and an energy storage development in eastern Tennessee as possible investments, both of which are still undergoing detailed environmental reviews.

The bonds are due on September 15, 2031, with interest to be paid semi-annually each March 15 and September 15. TVA has applied to list the bonds on the New York Stock Exchange.

Bank of America Securities acted as green structuring agent in addition to joint book-running manager alongside Barclays, Morgan Stanley, RBC Capital Markets and TD Securities.

(USD 1.0 = EUR 0.846)

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