John Sevier Combined Cycle Generation issues $900 million for project

By Lisa Kerner

Charlotte, N.C., Jan. 20 - John Sevier Combined Cycle Generation LLC issued $900 million of secured notes in connection with a lease-purchase agreement involving the Tennessee Valley Authority's Hawkins County, Tenn., facility, which is slated to begin operations in June.

Tennessee Valley Authority will lease the facility to John Sevier for a 50-year term in exchange for a one-time rental payment and then lease the facility back for 30 years, according to an 8-K filed by the Tennessee Valley Authority with the Securities and Exchange Commission.

In addition to the notes, John Sevier received $100 million from its equity investor. The company paid $970.04 million to the Tennessee Valley Authority on Jan. 17. The remaining $29.96 million will be used in part to fund the principal and interest due on the notes on the first debt service payment date.

John Sevier is a single-purpose Delaware limited liability company.

Tennessee Valley Authority is a Knoxville, Tenn.-based electricity provider.

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