The Tennessee Valley Authority expects to save more than $20 million a year in interest expenses over the next couple of years from a $1 billion bond issue priced Monday.
TVA said the two-year global bond issue - the first two-year note issued by the federal utility in more than 20 years - will carry an interest of 2.25 percent and replace a 4.5 percent note due April 1.
Although short-term interest rates have trended higher this year, TVA Treasurer Tammy Wilson said rates are still more favorable than previous debt issues by TVA.
"The proceeds from today's offering will refinance other debt maturing this year, but at a lower rate," TVA Chief Financial Officer John Thomas said. "The two-year maturity also fits well in TVA's debt profile, and will give us greater flexibility in managing obligations in the coming years."