[ad_1]
TVA debt rising after 30-year low
After falling last year to a 30-year low, the debt of the nation’s biggest government utility is rising again due to investments in new generation and transmission.
The Tennessee Valley Authority reported Tuesday that its long-term debt rose from $18.8 billion at the end of the last fiscal year on Sept. 30 to nearly $19.8 billion at the end of the most recent fiscal quarter. TVA is investing more than $2.8 billion to upgrade its transmission system over the next five years, including the construction of a $300 million system operations center in Meigs County, and TVA is planning to build more combined cycle natural gas plants and small modular reactors to boost its power generation.
TVA’s debt is still down by more than 20% from its peak reached more than a decade ago when the Government Accounting Office warned TVA that its borrowing levels could threaten its future. With the implied backing of the U.S. government, TVA is able to borrow money at lower rates than most investor-owned utilities and TVA has reported steady profits over the past decade and has boosted overall revenues while trimming its long-term debt.
TVA Chief Financial Officer John Thomas said Tuesday he expects that short-term interest rates for TVA will be pushed higher by the Federal Reserve Board, which is expected to again raise its short-term interest rate target by another quarter of a percentage point on Wednesday.
But Thomas said TVA was successful in issuing another $1 billion of new debt last month and has its debt obligations layered over many years to help avoid short-term volatility in the market.
“The amount of debt maturities we have in any one year are relatively small and this year we don’t have anything maturing,” Thomas said.
Starbucks adds 464 more stores
Starbucks posted stronger-than-expected sales in its fiscal second quarter as demand in China began to recover and it opened nearly 500 new stores around the world.
The Seattle coffee giant said Tuesday that its net revenue jumped 14% in the January-March period to $8.72 billion. That was better than the $8.41 billion Wall Street had forecast, according to analysts polled by FactSet.
Same-store sales — or sales at stores open at least a year — rose 11% as traffic picked up in stores. That also beat analysts’ forecast of a 7.3% increase.
Same-store sales in China were up 3%, reversing a 29% decline the company saw in its October-December period due to a spike in COVID infections. In North America, same-store sales climbed 12%, and the company reported more store visits as well as higher spending per visit.
Starbucks said it opened 464 net new stores during the quarter, including 100 in North America.
Europe’s inflation rises last month
Europe’s painful inflation inched higher last month, extending the squeeze on households and keeping pressure on the European Central Bank to unleash another large interest rate increase.
The European Union statistics agency Eurostat said Tuesday that consumer prices jumped 7% in April from a year earlier. That’s just up from the annual rate of 6.9% in March.
Food price inflation eased a little, falling to an annual 13.6% from March’s 15.5%. Core inflation, which excludes volatile food and fuel, slowed slightly but was still high at 5.6%. That underlines the expectation that the ECB will press ahead with its campaign to beat inflation into submission with rate hikes.
— Compiled by Dave Flessner
[ad_2]
Source link