Divestiture could cost TVA its top debt rating, Moody's says

April 11 Thu Apr 11, 2013 5:34pm EDT

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April 11 (Reuters) - The Tennessee Valley Authority would likely lose its Aaa debt rating if the federal government divested the public power system after a strategic review proposed in President Barack Obama's budget plan, Moody's Investors Service said on Thursday.

The Wall Street credit group said in a news release no downgrade or other rating action was needed now because it was far from clear a divestiture would be approved by Congress. In addition, such a move might face political opposition in the seven states served by the power producing authority.

But Moody's said: "In an event of a divesture, TVA is unlikely to maintain its Aaa rating."

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