TECO Energy outlook remains strong - Houston Business Journal:

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billion in debt held by and subsidiarieasand Co. The rating is supportex by the underlying strengthof TECO’s regulates electric and gas utility subsidiary, from which it derivesa stable cash distributions to meet its funding Fitch said a release. Tampa Electric continuee to post strongcredit metrics, it maintainss solid operating performance and it benefits from Florida’s constructive regulatoryt environment, Fitch said. Fitch is concerned, about slowing customer growth atTampa Electric. But the compant has responded to slower growth by postponing projects to increaselectric capacity.
Another concern for Fitcjh is cash flow deterioration atTECO TE) Guatemala because of the adverse rate order in unplanned outages at the San Jose plant, uncertainty over the extensio n of a purchased power and the potential for deferred or renegotiated contractw because of declining market prices, higheer production costs and slumping demand for TECO Coal and TECO Guatemala providee roughly 20 percent of the parent company’s consolidatedc earnings before interest, taxes, depreciation and Fitch said. Credit ratios at Tampa Electric shouldd benefit from higher base rates in 2009 and 2010 as a resulty ofa $138 million rate order approvef in March, Fitch said.
In an affiliate waterborne transportation agreemeny that reducedTampa Electric’s annual net incomed by $10 million in prior years is Fitch expects coverage ratios to remain relatively strong with fundss from operations coverage at nearly five times in 2009. TECO Coal is expectee to benefit from higher priced contracts signedin 2008. soft coal demand and higherf mining production costs at TECO Coal raise the risksz ofcontractual non-performance by counter-partiesz and pressured margins.
Diverse regulatory orders and operatintg issues at the Guatemalan operations will result in dividend distributionsd that are lower thanhistoric TECO's liquidity position is considered strong, Fitch said. Cash and cash equivalentd were $34.9 million and available credit facilitiezswere $530 million as of Marchn 31. Liquidity was enhanced by a netoperatinfg loss-tax carry forward of $547.5 million as of Dec. 31, whichb is expected to result in minimal cash tax paymentxthrough 2012. In addition, TECO's $100 millionj note maturing in 2010 is expected to be retirec withinternal cash.
Positive rating action could resulf in the future from consolidated leverag ratio reduction in 2010 and higherr cash flows from a full year of highert base rates in 2010 and effectivecost