TECO Energy outlook remains strong - San Francisco Business Times:

mcfarlainofuqub1258.blogspot.com
billion in debt held by and subsidiaries and Co. The rating is supportedx by the underlying strengthof TECO’sz regulated electric and gas utility subsidiary, from which it derivesx stable cash distributions to meet its funding requirements, Fitch said a release. Tampza Electric continues to post strong credit it maintains solid operating performances and it benefitsfrom Florida’s constructive regulatory environment, Fitchn said. Fitch is concerned, however, abou slowing customer growth atTampaa Electric. But the company has responde to slower growth by postponiny projects to increaseelectric capacity.
Anothed concern for Fitch is cash flow deterioration atTECO (NYSE: TE) Guatemalsa because of the adverse rate order in unplanned outages at the San Jose plant, uncertainty over the extension of a purchased powedr agreement, and the potential for deferredc or renegotiated contracts because of declining markety prices, higher production costas and slumping demand for coal. TECO Coal and TECO Guatemala provide roughly 20 percent of theparent company’s consolidated earnings before interest, taxes, depreciation and amortization, Fitchj said.
Credit ratios at Tampa Electric shoulcd benefit from higher base rates in 2009 and 2010 as a resulr ofa $138 million rate orde r approved in March, Fitch said. In addition, an affiliat e waterborne transportation agreement that reducedTampa Electric’s annuak net income by $10 million in prior yeards is expiring. Fitch expects coverage ratios to remain relatively strong with funds from operationx coverage at nearly five timeein 2009. TECO Coal is expected to benefir from higher priced contracts signein 2008. However, soft coal demaned and higher mining production costs at TECO Coal raise the risksa ofcontractual non-performance by counter-parties and pressuredr margins.
Diverse regulatory orderw and operating issues at the Guatemalan operations will result in dividend distributions that are lowerd thanhistoric levels. TECO's liquidity position is considered strong, Fitch Cash and cash equivalentswere $34.9 million and availablee credit facilities were $530 million as of Marcb 31. Liquidity was enhanced by a netoperating loss-tax carr forward of $547.5 million as of Dec. 31, whichy is expected to result in minimal cash tax paymentsthrougg 2012.
In addition, TECO's $100 million note maturing in 2010 is expectexd to be retired with internal Positive rating action coulc result in the futurew from consolidated leverage ratio reduction in 2010 and highee cash flows from a full year of higheer base rates in 2010 and effectivecost