Tennessee Valley Authority headquarters and TVA logoThe Tennessee Valley Authority is borrowing another $1 billion this week at the lowest cost ever for long-term debt.
The federal utility priced new 10-year bonds this week at 1.875 percent. Monday’s bond sale was the first for any U.S. agency or corporate borrower to price a 10-year bond with a yield below 2 percent, TVA spokesman Duncan Mansfield said.
TVA will cut its interest charges by more than half compared to the 3.875 percent rate the utility paid when it last issued 10-year bonds in February 2011. Compared with 18 months ago, TVA could save more than $100 million in interest expenses over the next decade.
TVA will use the proceeds to pay off higher-priced debt and to fund its ongoing construction of Watts Bar Unit 2.
“Achieving a record low interest rate allows us to keep power rates low while we continue to deliver reliable power to our customers, and supports our vision to be a leading provider of lower-cost, cleaner energy by 2020,” TVA Chief Financial Officer John Thomas said in a statement Tuesday.