TVA Without U.S. Leaves Little More Than Junk: Corporate Finance

President Barack Obama’s suggestion that the U.S. sell the Tennessee Valley Authority reveals a utility with a higher debt burden than any domestic peer except Calpine Corp. and the former TXU Corp.

While the largest government-owned power producer issues bonds with an Aaa credit rating from Moody’s Investors Service, debt accounts for 57 percent of Knoxville, Tennessee-based TVA’s assets. That’s more than any utility with at least $1 billion of bonds except Calpine, which left bankruptcy protection in 2008, and Energy Future Holdings Corp., known as TXU before its $48 billion buyout in 2007, which Moody’s says faces a “material restructuring” within 12 months.