Fitch assigns an 'AAA' rating to the Tennessee Valley
Authority's (TVA) $1 billion global power bonds 2006 series A. The
Rating Outlook is Stable. The bonds priced today with Merrill Lynch
and Morgan Stanley as co-senior managers.
The rating primarily reflects TVA's status as a wholly-owned corporation of the U.S. government and Fitch's assessment of the likelihood and quality of government support for similarly rated institution's (such as Fannie Mae and Freddie Mac, both rated 'AAA' by Fitch) should it encounter difficulties. The rating also takes into account the TVA's strong historical operating and financial platform, as well as its solid competitive position (compared to other public power utilities Fitch rates in the 'AA' category), and its integral role in developing the regional economy.
TVA's outstanding debt is not full faith and credit, or limited obligations of the U.S. government. However, Fitch believes that U.S. authorities would use extraordinary powers to provide support to its operations and senior debt obligations in the unlikely event that it encountered difficulties. This analysis is supported by the TVA's ownership by the U.S. government, the sizable role that TVA plays in the Tennessee Valley and broader regional economies, and the level of its obligations that are held by domestic and other foreign based investors (similar to that of government sponsored entities (GSE)).
TVA is the nation's largest public power utility managing a substantial power generation and transmission (G&T) system, and serving a territory approximating 80,000 square miles located in all of Tennessee, northern Alabama, northeast Mississippi, southwestern Kentucky, and a small part of Georgia and North Carolina. TVA is a wholesale electric provider with 158 distribution members and 62 direct industrial companies for a total retail customer base of about 8.3 million. The TVA also manages the nations fifth largest river system and provides non-power services including navigation, flood control, and agricultural and industrial development. In fiscal 2005, TVA met an all-time TVA record peak load of 31,924 megawatts (MW) in July. TVA has a total dependable power system capacity of about 34,000 MW. TVA had total power sales of 171 billion kilowatt-hours (kWh) in 2005, comprising 160 billion kWh generated by TVA, with the balance from purchases. TVA's fuel mix is diverse with energy generation consisting of 62% fossil, 28% nuclear, and 10% hydro.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
The rating primarily reflects TVA's status as a wholly-owned corporation of the U.S. government and Fitch's assessment of the likelihood and quality of government support for similarly rated institution's (such as Fannie Mae and Freddie Mac, both rated 'AAA' by Fitch) should it encounter difficulties. The rating also takes into account the TVA's strong historical operating and financial platform, as well as its solid competitive position (compared to other public power utilities Fitch rates in the 'AA' category), and its integral role in developing the regional economy.
TVA's outstanding debt is not full faith and credit, or limited obligations of the U.S. government. However, Fitch believes that U.S. authorities would use extraordinary powers to provide support to its operations and senior debt obligations in the unlikely event that it encountered difficulties. This analysis is supported by the TVA's ownership by the U.S. government, the sizable role that TVA plays in the Tennessee Valley and broader regional economies, and the level of its obligations that are held by domestic and other foreign based investors (similar to that of government sponsored entities (GSE)).
TVA is the nation's largest public power utility managing a substantial power generation and transmission (G&T) system, and serving a territory approximating 80,000 square miles located in all of Tennessee, northern Alabama, northeast Mississippi, southwestern Kentucky, and a small part of Georgia and North Carolina. TVA is a wholesale electric provider with 158 distribution members and 62 direct industrial companies for a total retail customer base of about 8.3 million. The TVA also manages the nations fifth largest river system and provides non-power services including navigation, flood control, and agricultural and industrial development. In fiscal 2005, TVA met an all-time TVA record peak load of 31,924 megawatts (MW) in July. TVA has a total dependable power system capacity of about 34,000 MW. TVA had total power sales of 171 billion kilowatt-hours (kWh) in 2005, comprising 160 billion kWh generated by TVA, with the balance from purchases. TVA's fuel mix is diverse with energy generation consisting of 62% fossil, 28% nuclear, and 10% hydro.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.