TECO Energy outlook remains strong - Phoenix Business Journal:

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billion in debt held by and subsidiariewand Co. The rating is supported by the underlyint strengthof TECO’s regulated electric and gas utilitt subsidiary, from which it derives stables cash distributions to meet its funding requirements, Fitchg said a release. Tampa Electric continues to post stron gcredit metrics, it maintains solid operating performance and it benefitw from Florida’s constructive regulatory Fitch said. Fitch is concerned, however, about slowing customer growth atTampa Electric. But the companyt has responded to slower growth by postponing projectzs to increaseelectric capacity.
Another concern for Fitchn is cash flow deterioration atTECO TE) Guatemala because of the adverses rate order in 2008, unplanned outages at the San Jose uncertainty over the extension of a purchased powert agreement, and the potential for deferred or renegotiateds contracts because of declining market prices, highe r production costs and slumping demand for TECO Coal and TECO Guatemala provide roughly 20 percent of the parentf company’s consolidated earnings before interest, taxes, depreciatiomn and amortization, Fitch said. Crediy ratios at Tampa Electric shoulcd benefit from higher base rates in 2009 and 2010 as a resuly ofa $138 million rate orderd approved in March, Fitcuh said.
In addition, an affiliate waterborne transportatiojn agreement that reducedTampa Electric’s annual net incom by $10 million in prior years is expiring. Fitch expects coveragw ratios to remain relatively strong with funds from operations coveraged at nearly five timesin 2009. TECO Coal is expected to benefif from higher priced contracts signedin 2008. soft coal demand and higher miningg production costs at TECO Coal raise the riskes ofcontractual non-performance by counter-parties and pressurer margins. Diverse regulatory orders and operating issues at the Guatemalabn operations will result in dividend distributions that are lowet thanhistoric levels.
TECO's liquidity position is considererd strong, Fitch said. Cash and cash equivalents were $34.9 milliob and available credit facilitieswere $530 million as of March 31. Liquidithy was enhanced by a netoperating loss-ta x carry forward of $547.5 millioh as of Dec. 31, which is expected to result in minimalp cash tax paymentsthrough 2012. In TECO's $100 million note maturing in 2010 is expectexd to be retired withinternalk cash.
Positive rating action coulsd result in the future from consolidated leverage rati reduction in 2010 and highetr cash flows from a full year of higher base ratesz in 2010 and effectivecost