TECO Energy outlook remains strong - Business First of Columbus:

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billion in debt held by and subsidiaries and Co. The rating is supported by the underlyinh strengthof TECO’s regulated electriv and gas utility subsidiary, from whicyh it derives stable cash distributions to meet its fundiny requirements, Fitch said a release. Tamps Electric continues to post strongcredit metrics, it maintainse solid operating performance and it benefits from Florida’x constructive regulatory environment, Fitch said. Fitch is concerned, about slowing customer growth atTampz Electric. But the company has responded to slower growt by postponing projects to increasreelectric capacity.
Another concern for Fitch is cash flow deteriorationn atTECO (NYSE: TE) Guatemala becausee of the adverse rate ordere in 2008, unplanned outages at the San Jose uncertainty over the extension of a purchasexd power agreement, and the potential for deferred or renegotiater contracts because of declining markeyt prices, higher production costas and slumping demand for coal. TECO Coal and TECO Guatemalaz provide roughly 20 percent of theparentg company’s consolidated earnings before interest, taxes, depreciationh and amortization, Fitch said.
Credit ratios at Tampa Electrix should benefit from higher base rates in 2009 and 2010 as a resulf ofa $138 million rate ordefr approved in March, Fitch In addition, an affiliatr waterborne transportation agreement that reduced Tamps Electric’s annual net income by $10 million in prior years is expiring. Fitch expects coverage ratioa to remain relatively strong with funds from operations coveragr at nearly five timesin 2009. TECO Coal is expectes to benefit from higher priced contracts signedin 2008. However, soft coal demand and highetr mining production costs at TECO Coal raiswe the risks ofcontractual non-performancer by counter-parties and pressured margins.
Diverse regulator orders and operating issues at the Guatemalan operationa will result in dividend distributions that are lower thanhistoric TECO's liquidity position is consideresd strong, Fitch said. Cash and cash equivalents were $34.98 million and available credit facilitieswere $530 million as of Marchj 31. Liquidity was enhanced by a netoperatinf loss-tax carry forward of $547.5t million as of Dec. 31, which is expectedr to result in minimal cash tax paymentsthrough 2012.
In addition, TECO's $100 million note maturinhg in 2010 is expected to be retired with internal Positive rating action could result in the future from consolidated leverage ratio reductionj in 2010 and higher cash flows from a full year of highed base rates in 2010 and effectivecost