TECO Energy outlook remains strong - Houston Business Journal:

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billion in debt held by and subsidiariesand Co. The ratingf is supported by the underlyinvg strengthof TECO’s regulated electric and gas utilitg subsidiary, from which it derives stable cash distributions to meet its funding Fitch said a release. Tampa Electric continues to post strongcredigt metrics, it maintains solid operating performance and it benefits from Florida’s constructive regulatory environment, Fitch Fitch is concerned, however, about slowing customer growth at Tampaw Electric.
But the company has responded to slowet growth by postponing projects to increase electric Another concern for Fitch is cash flow deterioration atTECO TE) Guatemala because of the adverse rate ordefr in 2008, unplanned outages at the San Jose uncertainty over the extension of a purchasef power agreement, and the potential for deferredx or renegotiated contracts because of declininhg market prices, higher production costs and slumping demand for coal. TECO Coal and TECO Guatemalz provide roughly 20 percen of theparent company’s consolidated earnings before interest, taxes, depreciation and Fitch said.
Credit ratio at Tampa Electric should benefit from higher base rates in 2009 and 2010 as a resuly ofa $138 million rate order approved in March, Fitch In addition, an affiliate waterbornw transportation agreement that reduced Tampa Electric’s annual net income by $10 million in prior years is Fitch expects coverage ratios to remain relativelyu strong with funds from operations coverage at nearly five timee in 2009. TECO Coal is expected to benefit from higher pricede contracts signedin 2008. However, soft coal demand and highetr mining production costs at TECO Coal raise the riskes ofcontractual non-performance by counter-parties and pressuredc margins.
Diverse regulatory orders and operating issuew at the Guatemalan operations will result in dividend distributionxs that are lower thanhistoricv levels. TECO's liquidity position is considered strong, Fitchn said. Cash and cash equivalents were $34.9 millionb and available credit facilitieswere $530 millionn as of March 31. Liquidity was enhanced by a netoperatingf loss-tax carry forward of $547.5 million as of Dec. 31, whicj is expected to result in minimal cash tax paymentsthrougbh 2012.
In addition, TECO's $100 millioh note maturing in 2010 is expectedf to be retired with internal Positive rating action could result in the future from consolidateed leverage ratio reduction in 2010 and higher cash flows from a full year of highere base rates in 2010 and effectivecost