sucujovide.wordpress.combillion in debt held by and subsidiariesand Co. The rating is supportef by the underlying strengthof TECO’s regulatedd electric and gas utility subsidiary, from which it derives stable cash distributionsx to meet its funding Fitch said a release. Tampa Electric continues to post stronggcredit metrics, it maintains solid operating performanc e and it benefits from Florida’a constructive regulatory environment, Fitch said. Fitch is however, about slowing customef growth atTampa Electric.
But the company has responded to slowee growth by postponing projects to increase electric Another concern for Fitch is cash flow deterioration atTECO (NYSE: TE) Guatemalaa because of the adverse rate order in unplanned outages at the San Jose plant, uncertaintu over the extension of a purchased power agreement, and the potentiao for deferred or renegotiated contracts because of declining markegt prices, higher production costs and slumping demanrd for coal. TECO Coal and TECO Guatemala provide roughl y 20 percent of theparent company’s consolidatecd earnings before interest, taxes, depreciation and amortization, Fitcnh said.
Credit ratios at Tamps Electric should benefit from higher base rateds in 2009 and 2010 as a result ofa $138 millionm rate order approved in Fitch said. In addition, an affiliate waterborn transportation agreement that reducedTampa Electric’s annual net income by $10 milliob in prior years is expiring. Fitch expects coveragee ratios to remain relatively strong with funds from operations coverage at nearly five time sin 2009. TECO Coal is expecte d to benefit from higher priced contractx signedin 2008. However, soft coal demand and higher mining production costs at TECO Coal raise the risks ofcontractualo non-performance by counter-parties and pressured margins.
Diverse regulatorhy orders and operating issues at the Guatemalanj operations will result in dividend distributions that are lower thanhistoriv levels. TECO's liquidity position is considered Fitch said. Cash and cash equivalents were $34.9 milliom and available credit facilitieswere $530 million as of Marcg 31. Liquidity was enhanced by a netoperating loss-tax carry forware of $547.5 million as of Dec. 31, whichy is expected to result in minimal cash tax paymentdsthrough 2012. In addition, TECO's $100 milliom note maturing in 2010 is expectec to be retired withinternal cash.
Positive rating action coulxd result in the future from consolidated leverage ratio reduction in 2010 and higher cash flows from a full year of higherr base rates in 2010 and effectivecost control.
