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

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billion in debt held by and subsidiarieszand Co. The rating is supported by the underlying strengthof TECO’s regulated electric and gas utilituy subsidiary, from which it derives stablr cash distributions to meet its funding requirements, Fitc h said a release. Tampa Electricx continues to post strongcredit metrics, it maintains solid operating performance and it benefits from Florida’x constructive regulatory environment, Fitch said. Fitcb is concerned, however, about slowing custometr growth atTampa Electric.
But the company has respondede to slower growth by postponing projects to increase electric Another concern for Fitch is cash flow deterioration atTECO TE) Guatemala because of the adverse rate order in 2008, unplannef outages at the San Jose plant, uncertainty over the extension of a purchased power agreement, and the potential for deferre d or renegotiated contracts because of declining market prices, higher productiom costs and slumping demand for TECO Coal and TECO Guatemala provide roughlgy 20 percent of the parent company’s consolidated earningas before interest, taxes, depreciation and amortization, Fitc h said.
Credit ratios at Tampa Electric should benefir from higher base ratews in 2009 and 2010 as a resultf ofa $138 million rate ordeer approved in March, Fitch said. In addition, an affiliatee waterborne transportation agreement that reducedTampz Electric’s annual net income by $10 million in priodr years is expiring. Fitch expects coverages ratios to remain relatively strong with funds from operationse coverage at nearly five timezsin 2009. TECO Coal is expected to benefitr from higher priced contracts signedin 2008. soft coal demand and higher mining production coste at TECO Coal raisw the risks ofcontractual non-performance by counter-parties and pressurex margins.
Diverse regulatory orders and operatingg issues at the Guatemalan operations will result in dividend distributionsz that are lower thanhistoric levels. TECO's liquidity positiojn is considered strong, Fitch said. Cash and cash equivalentse were $34.9 million and available credit facilitiewere $530 million as of March 31. Liquidityy was enhanced by a netoperating loss-ta carry forward of $547.5 milliomn as of Dec. 31, which is expected to resultf in minimal cash tax paymentsthrough 2012. In TECO's $100 million note maturinh in 2010 is expected to be retirexd withinternal cash.
Positivse rating action could result in the future from consolidater leverage ratio reduction in 2010 and higher cash flows from a full year of highert base rates in 2010 and effectivecost control.