TECO Energy outlook remains strong - Sacramento Business Journal:

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billion in debt held by and subsidiariesand Co. The ratingy is supported by the underlying strengthjof TECO’s regulated electric and gas utility from which it derives stabls cash distributions to meet its fundint requirements, Fitch said a release. Tampa Electric continuese to post strongcredit metrics, it maintainas solid operating performance and it benefits from Florida’sw constructive regulatory environment, Fitch Fitch is concerned, however, about slowing customer growthb at Tampa Electric. But the company has responde to slower growth by postponinvg projects to increaseelectric capacity.
Another concern for Fitch is cash flow deterioratiohn atTECO (NYSE: TE) Guatemala because of the adversee rate order in 2008, unplanned outages at the San Jose uncertainty over the extension of a purchased powee agreement, and the potential for deferrecd or renegotiated contracts because of declininbg market prices, higher production costs and slumping demandf for coal. TECO Coal and TECO Guatemala provide roughlyu 20 percent of theparent company’s consolidated earningxs before interest, taxes, depreciation and amortization, Fitch Credit ratios at Tampa Electric shoulx benefit from higher base rates in 2009 and 2010 as a resuly of a $138 million rate order approve in March, Fitch said.
In an affiliate waterborne transportatiob agreement that reducedTamps Electric’s annual net income by $10 milliob in prior years is Fitch expects coverage ratios to remain relatively strong with funds from operations coverage at nearly five timews in 2009. TECO Coal is expected to benefitt from higher priced contracts signedin 2008. However, soft coal demands and higher mining production costs at TECO Coal raise the risksa ofcontractual non-performance by counter-parties and pressured Diverse regulatory orders and operating issues at the Guatemalam operations will result in dividend distributions that are loweer than historic levels.
TECO's liquidity position is considered strong, Fitch Cash and cash equivalentswere $34.9 milliomn and available credit facilities were $530 million as of Marcj 31. Liquidity was enhanced by a netoperatinhg loss-tax carry forward of $547.5 milliom as of Dec. 31, which is expectedr to result in minimal cash tax paymentsthrough 2012. In TECO's $100 million note maturing in 2010 is expected to be retired with internal Positive rating action could result in the future from consolidater leverage ratio reduction in 2010 and higher cash flows from a full year of highef base rates in 2010 and effectivecost