TVA debt rating downgraded by Standard and Poor's

By The Associated Press

CHATTANOOGA, Tenn. (AP) — A credit rating agency has issued a negative warning on Tennessee Valley Authority debt for the first time in two decades following a similar action on the federal government.

Standard and Poor’s issued the negative warning on U.S. debt with Congress facing a decision on whether to raise the borrowing limit.

TVA spokesman Scott Brooks told the Chattanooga Times Free Press the warning does not reflect any change in the utility’s financial strength. The last such warning was from 1989 to 1991.

Standard and Poor’s credit analyst Theodore Chapman said the warning may reflect that the government is less likely to stand behind TVA debt.

Chapman reaffirmed the top AAA long-term rating for TVA on bonds it issues to finance power projects.