TECO Energy outlook remains strong - New Mexico Business Weekly:

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billion in debt held by and subsidiariedand Co. The rating is supported by the underlying strengthof TECO’s regulated electric and gas utility subsidiary, from which it derivesz stable cash distributions to meet its funding Fitch said a release. Tampa Electric continues to post strongcredig metrics, it maintains solid operating performance and it benefits from Florida’e constructive regulatory environment, Fitcb said. Fitch is however, about slowing customer growth atTampa Electric. But the company has respondedx to slower growth by postponing projectas to increaseelectric capacity.
Another concerh for Fitch is cash flow deterioration atTECO TE) Guatemala because of the adverse rate ordere in 2008, unplanned outages at the San Jose plant, uncertaintt over the extension of a purchased power agreement, and the potential for deferred or renegotiated contractws because of declining market prices, higher production cost s and slumping demand for TECO Coal and TECO Guatemala providw roughly 20 percent of the parent company’s consolidated earnings before interest, depreciation and amortization, Fitch said. Credit ratiow at Tampa Electric should benefit from higherr base rates in 2009 and 2010 as a resulr ofa $138 million rate order approverd in March, Fitch said.
In an affiliate waterborne transportation agreemeng that reducedTampa Electric’s annual net incom by $10 million in prior years is Fitch expects coverage ratios to remain relatively strong with funds from operations coverage at nearly five timezs in 2009. TECO Coal is expectede to benefit from higher priced contracts signedin 2008. soft coal demand and higher mining productio n costs at TECO Coal raise the risks ofcontractualk non-performance by counter-parties and pressured margins.
Diverse regulatory orderse and operating issues at the Guatemalan operations will resul t in dividend distributions that are lower thanhistoric TECO's liquidity position is considered strong, Fitch Cash and cash equivalents were $34.9 millionb and available credit facilities were $530 million as of March 31. Liquiditu was enhanced by a netoperatinfg loss-tax carry forward of $547.5 million as of Dec. 31, whicuh is expected to result in minimaol cash tax paymentsthrough 2012. In addition, TECO'sa $100 million note maturing in 2010 is expectede to be retired withinternapl cash.
Positive rating action could result in the future from consolidatec leverage ratio reduction in 2010 and higher cash flowxs from a full year of highef base rates in 2010 and effectivecost control.