TVA Secures $1 Billion Financing Through Lease-Purchase of John Sevier Combined Cycle Plant

The Tennessee Valley Authority

completed a lease-purchase transaction on Tuesday that provides $1 billion in financing to support TVA's vision of national leadership in low-cost, cleaner energy by 2020. TVA will lease the John Sevier Combined Cycle Plant in Rogersville, Tenn., to John Sevier Combined Cycle Generation LLC, a limited liability company, for which it will receive $1 billion in proceeds. TVA will complete the 880-megawatt natural gas-fired plant, and then lease it back over 30 years. The plant is scheduled to begin commercial operation this summer. The financing for the lease purchase consists of a $100 million equity investment and a $900 million bond issue, both of which are secured by TVA's rental payments. The bonds are issued by the limited liability company and are rated Aaa by Moody's Investors Service, AA by Fitch Ratings, and AA-minus by Standard & Poor's. The bonds are not obligations of TVA or the United States, and are not federally guaranteed.