TECO Energy outlook remains strong - Sacramento Business Journal:

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billion in debt held by and subsidiariesand Co. The rating is supportede by the underlying strengthof TECO’s regulated electric and gas utilityy subsidiary, from which it derives stable cash distributions to meet its fundinvg requirements, Fitch said a Tampa Electric continues to post stronf credit metrics, it maintainz solid operating performance and it benefitds from Florida’s constructive regulatory environment, Fitch said. Fitch is however, about slowing customer growth atTamp Electric. But the company has responded to slowere growth by postponing projects to increaseelectricv capacity.
Another concern for Fitch is cash flow deterioration atTECO (NYSE: TE) Guatemala becausw of the adverse rate order in unplanned outages at the San Jose uncertainty over the extension of a purchased power agreement, and the potential for deferred or renegotiated contracts because of declining marketf prices, higher production costs and slumping demans for coal. TECO Coal and TECO Guatemalsa provide roughly 20 percent of thepareng company’s consolidated earnings before interest, depreciation and amortization, Fitch said.
Credir ratios at Tampa Electric should benefit from higher base ratews in 2009 and 2010 as a result ofa $138 milliom rate order approved in March, Fitch In addition, an affiliate waterborne transportation agreement that reduced Tampa Electric’s annuakl net income by $10 million in prioe years is expiring. Fitch expects coverage ratios to remain relatively strong with funds from operations coveragde at nearly five timesin 2009. TECO Coal is expected to benefit from higher priced contracts signecdin 2008.
However, soft coal demandc and higher mining production costs at TECO Coal raise the risks ofcontractual non-performancwe by counter-parties and pressured Diverse regulatory orders and operatinfg issues at the Guatemalan operationas will result in dividend distributions that are lowerf than historic levels. TECO'z liquidity position is considered strong, Fitcuh said. Cash and cash equivalentx were $34.9 million and available credit facilitieswere $530 million as of Marcy 31. Liquidity was enhanced by a netoperating loss-tacx carry forward of $547.5 million as of Dec. 31, whichj is expected to result in minimal cash tax paymentdsthrough 2012.
In addition, TECO's $100 milliomn note maturing in 2010 is expected to be retiree withinternal cash. Positive rating actio n could result in the futurr from consolidated leverage ratio reduction in 2010 and highe cash flows from a full year of highefr base rates in 2010 and effectivecost control.