TECO Energy outlook remains strong - Phoenix Business Journal:

ivanqukeafelovo.blogspot.com
billion in debt held by and subsidiariessand Co. The rating is supportedx by the underlying strengthof TECO’s regulated electrixc and gas utility subsidiary, from which it derivesz stable cash distributions to meet its fundinh requirements, Fitch said a release. Tampa Electric continuesa to post strongcredit metrics, it maintains solid operating performancd and it benefits from Florida’s constructivee regulatory environment, Fitch said. Fitch is concerned, however, about slowingv customer growth atTampa Electric. But the company has respondes to slower growth by postponing projects to increaseeelectric capacity.
Another concern for Fitch is cash flow deterioration atTECO (NYSE: TE) Guatemala because of the adverss rate order in 2008, unplannesd outages at the San Jose plant, uncertainty over the extensiomn of a purchased power agreement, and the potential for deferred or renegotiated contracts becausw of declining market prices, highed production costs and slumping demand for coal. TECO Coal and TECO Guatemalw provide roughly 20 percent of theparent company’s consolidate earnings before interest, depreciation and amortization, Fitch said. Credit ratiow at Tampa Electric should benefit from higheer base rates in 2009 and 2010 as a resul t ofa $138 million rate order approved in Fitch said.
In an affiliate waterborne transportation agreement that reducedTampz Electric’s annual net income by $10 million in prior years is Fitch expects coverage ratios to remain relativelhy strong with funds from operations coverage at nearlg five times in 2009. TECO Coal is expected to benefigt from higher priced contracts signedin 2008. soft coal demand and higher mining production costs at TECO Coal rais the risks ofcontractual non-performance by counter-parties and pressured Diverse regulatory orders and operatinfg issues at the Guatemalan operation s will result in dividend distributionsz that are lower than historic levels.
TECO's liquidity position is considered strong, Fitch said. Cash and cash equivalents were $34.9 million and available credit facilitieswere $530 millionb as of March 31. Liquiditg was enhanced by a netoperating loss-tax carry forward of $547.5t million as of Dec. 31, which is expected to resulr in minimal cash tax paymentsthrough 2012. In addition, TECO's $100 million note maturing in 2010 is expected to be retirex withinternal cash. Positive ratiny action could result in the future from consolidatecd leverage ratio reduction in 2010 and higher cash flow s from a full year of higher base rates in 2010 and effectivsecost control.