TECO Energy outlook remains strong - Baltimore Business Journal:

zuloraxelewo.blogspot.com
billion in debt held by and subsidiariessand Co. The rating is supported by the underlyinfg strengthof TECO’s regulated electric and gas utilitt subsidiary, from which it derives stable cash distribution to meet its funding Fitch said a release. Tampaq Electric continues to post strongcredit metrics, it maintains solid operatinvg performance and it benefits from Florida’s constructive regulatort environment, Fitch said. Fitch is concerned, however, about slowing customerf growth atTampa Electric.
But the compang has responded to slower growth by postponingt projects to increase electric Another concern for Fitch is cash flow deterioration atTECO (NYSE: TE) Guatemalq because of the adverse rate order in unplanned outages at the San Jose plant, uncertaintgy over the extension of a purchased power and the potential for deferred or renegotiated contractw because of declining market prices, higher production costx and slumping demand for coal.
TECO Coal and TECO Guatemalsa provide roughly 20 percent of theparenrt company’s consolidated earnings before interest, taxes, depreciation and amortization, Fitch Credit ratios at Tampaz Electric should benefit from highert base rates in 2009 and 2010 as a result of a $138 millioj rate order approved in March, Fitch said. In addition, an affiliats waterborne transportation agreement that reducedTampa Electric’s annual net income by $10 million in priodr years is expiring. Fitchj expects coverage ratios to remainb relatively strong with fund s from operations coverage at nearly five timesin 2009. TECO Coal is expecterd to benefit from higher priced contracts signedin 2008.
soft coal demand and higher mining production costsz at TECO Coal raise the risks ofcontractuaol non-performance by counter-parties and pressured margins. Diverse regulatory orders and operating issue s at the Guatemalan operations will resulft in dividend distributions that are lowerd thanhistoric levels. TECO's liquidity position is considered strong, Fitch said. Cash and cash equivalents were $34.9 million and available credit facilitieswere $530 milliojn as of March 31. Liquidity was enhanced by a net operating loss-tax carry forward of $547.5 million as of Dec. 31, whicj is expected to result in minimal cash tax paymentxsthrough 2012.
In addition, TECO'z $100 million note maturing in 2010 is expected to be retired withinternakl cash. Positive rating action could result in the futures from consolidated leverage ratio reductiobn in 2010 and higher cash flows from a full year of highedr base rates in 2010 and effectivecost