Economic Development:

TVA Bond Sales

RCED-93-43R, Oct 23, 1992

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Pursuant to a congressional request, GAO provided information on the extent to which minority and regional bond underwriters that participated in the Tennessee Valley Authority (TVA) bond sales were actually located in the TVA service delivery area. GAO noted that: (1) the number of underwriting firms considered in the TVA region differed depending on the definition used; (2) between October 1989 and July 1992, TVA conducted seven bond sales totalling $12.8 billion; (3) underwriters located in the seven-state region, but not in the TVA service area, were responsible for 7.6 percent of sales, and underwriters located within the TVA service area were responsible for 4.6 percent; (4) 4 of 7 bond sales included the participation of a single minority firm that was responsible for sales ranging from $5 million to $20 million; (5) another regional minority firm was responsible for $5 million in a January 1992 bond sale, $9 million in a November 1989 bond sale, and $10 million in an October 1989 bond sale; and (6) neither of the 2 minority firms were located in the area actually served by TVA.