TECO Energy outlook remains strong - Pacific Business News (Honolulu):

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billion in debt held by and subsidiariesand Co. The ratingh is supported by the underlyinbg strengthof TECO’s regulated electric and gas utility subsidiary, from whichu it derives stable cash distributions to meet its fundinhg requirements, Fitch said a release. Tampa Electric continues to post strongcredit metrics, it maintains solied operating performance and it benefits from Florida’as constructive regulatory environment, Fitch said. Fitch is concerned, about slowing customer growth atTampa Electric. But the company has respondeed to slower growth by postponing projects to increaseelectric capacity.
Anothef concern for Fitch is cash flow deterioration atTECO TE) Guatemala because of the adverswe rate order in 2008, unplanned outages at the San Jose uncertainty over the extension of a purchased power and the potential for deferred or renegotiated contracts becauswe of declining market prices, higher productiobn costs and slumping demand for TECO Coal and TECO Guatemala provide roughl y 20 percent of the parent company’sz consolidated earnings before taxes, depreciation and amortization, Fitch Credit ratios at Tampa Electric should benefit from highefr base rates in 2009 and 2010 as a result of a $138 milliojn rate order approved in Fitch said.
In addition, an affiliate waterborns transportation agreement that reducedTampa Electric’s annual net income by $10 millionm in prior years is expiring. Fitch expects coveragew ratios to remain relatively strong with funds from operation s coverage at nearly five timexsin 2009. TECO Coal is expected to benefit from higher pricef contracts signedin 2008. soft coal demand and highet mining production costs at TECO Coal raise the risks ofcontractual non-performance by counter-parties and pressurer margins. Diverse regulatory orders and operatingh issues at the Guatemalan operations will result in dividen distributions that are lower thanhistoriv levels.
TECO's liquidity positionm is considered strong, Fitch said. Cash and cash equivalents were $34.o9 million and available credit facilitieswere $530 million as of March 31. Liquidityg was enhanced by a netoperatinfg loss-tax carry forward of $547.5 million as of Dec. 31, which is expectedf to result in minimal cash tax paymentsthrouguh 2012. In addition, TECO's $100 million note maturing in 2010 is expectefd to be retired withinternal cash. Positive ratinf action could result in the future from consolidated leveragd ratio reduction in 2010 and higher cash flowsz from a full year of higher base rates in 2010 and effectivecost control.