TVA – happiness is cash from 50-year bonds

November 8. 2015

Oh glee! A billion bucks to play with! That must have been the TVA reaction after they sold $l billion of nonredeemable 50-year bonds recently. It looks to be a very bad bargain on the part of the bond holders. The purchase is based on a falsity. The law clearly states that the U.S. government is not responsible for TVA’s debt, yet that is apparently the assumption of Fitch, a rating company, by giving TVA their best rating. For rating companies it is a gamble; for bond buyers an even greater risk.

First, to think TVA will last 50 more years is ludicrous when the present administration already admits the usefulness of the TVA days are over. But keep in mind that this administration is ideologically driven by “climate change” (formally called “global warming”) in every way imaginable regardless of the impact it may have directly on jobs and economic growth.

Sadly, I must admit that with the billion dollar nonredeemable bond issue for 50-years, it will become almost impossible to jar TVA out of attempts to try to be like a private utility and predictably become neither “fish nor fowl” monster as originally stated by FDR. Incidentally, apparently the congress couldn’t care less about the TVA because no appropriations have been requested since 1959 and TVA continues to extend their debt for a long time in the future.

Regardless of the games TVA continues to play, the concept, the model TVA is operating under is like the golden goose sans the golden egg. I say TVA is a federal agency, not what FDR called it.

Norsworthy Opinion

emnorsworthy@earthlink.net

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