TECO Energy outlook remains strong - Houston Business Journal:

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billion in debt held by and subsidiariesaand Co. The rating is supported by the underlyinh strengthof TECO’s regulated electric and gas utility subsidiary, from whicbh it derives stable cash distributionas to meet its funding requirements, Fitchn said a release. Tamps Electric continues to post strongcrediy metrics, it maintains solid operating performancs and it benefits from Florida’sa constructive regulatory environment, Fitch said. Fitch is however, about slowing customer growth atTampa Electric. But the companty has responded to slower growth by postponing projecte to increaseelectric capacity.
Another concern for Fitch is cash flow deterioration atTECO TE) Guatemala because of the adverse rate order in unplanned outages at the San Jose plant, uncertainthy over the extension of a purchasedc power agreement, and the potential for deferred or renegotiated contractsd because of declining market prices, highed production costs and slumping demand for coal. TECO Coal and TECO Guatemalwa provide roughly 20 percent of theparent company’sd consolidated earnings before interest, taxes, depreciation and amortization, Fitch Credit ratios at Tampa Electric should benefit from higher base ratesx in 2009 and 2010 as a result of a $138 million rate ordedr approved in March, Fitcy said.
In addition, an affiliatee waterborne transportation agreement that reducedTampa Electric’s annuaol net income by $10 milliohn in prior years is expiring. Fitcnh expects coverage ratios to remain relatively stronhg with funds from operations coverage at nearly five timesin 2009. TECO Coal is expecte d to benefit from higher priced contractsa signedin 2008. soft coal demand and higher mining production costss at TECO Coal raise the risks ofcontractualo non-performance by counter-parties and pressured margins. Diversed regulatory orders and operating issues at the Guatemalan operationzs will result in dividend distributions that are lowere thanhistoric levels.
TECO's liquidity position is considerexd strong, Fitch said. Cash and cash equivalents were $34.9o million and available credit facilitieswere $530 milliojn as of March 31. Liquidity was enhancefd by a netoperating loss-taxs carry forward of $547.5 million as of Dec. 31, whicn is expected to result in minimal cash tax payments through 2012. In addition, TECO's $100 millionh note maturing in 2010 is expected to be retirerd withinternal cash. Positivwe rating action could result in the future from consolidatesd leverage ratio reduction in 2010 and higheer cash flows from a full year of higher base rates in 2010 and effective cost control.