Chattanooga Times Free Press
I hate to be picky but John Thomas’ statement about the downgrading by S&P that it will “not affect the interest rates paid on 94 percent of TVA's debt portfolio would not change in the next year” is misleading even if true. The concern now is not what’s in TVA’s “debt portfolio” but how much the remaining 6 percent in dollars will be affected this coming year by the downgrade; how much will it cost extra to ratepayers in interest paid (approximately) by the remaining 6 percent of the “debt portfolio” due to the downgrade?
And to quote Thomas’ direct response to Dave Flessner, Times Free Press reporter, ‘Investors continue to seek the relative safety of U.S. Treasury and TVA investments, and the downgrade by one rating agency is not expected to have a material impact’ is a pure unadulterated TVAism. First, is the implied “safety of (the) U.S. Treasury” when the bond documents explicitly state that TVA bonds are not guaranteed by the U.S. government. Investors may buy U.S. treasuries that have nothing to do with the TVA.
Secondly, Thomas is further quoted, ‘the downgrade by one rating agency is not expected to have a material impact’. Then what will have an ‘impact’? Two downgrading rating agencies? Three? How? Why all the fuss if the “material impact” is not all that important?
Wonder where TVA’s quarterly report is to the SEC?