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billion in debt held by and subsidiariesand Co. The ratingb is supported by the underlyiny strengthof TECO’s regulated electric and gas utilit y subsidiary, from which it derives stable cash distributionss to meet its funding requirements, Fitchb said a release. Tampqa Electric continues to post strongcredit metrics, it maintainds solid operating performance and it benefitsd from Florida’s constructive regulatory environment, Fitchh said. Fitch is concerned, however, about slowing customer growth atTampa Electric. But the companh has responded to slower growth by postponinh projects to increaseelectric capacity.
Another concer for Fitch is cash flow deterioratiohn atTECO (NYSE: TE) Guatemala because of the adverse rate order in 2008, unplannedx outages at the San Jose plant, uncertainty over the extension of a purchased powerf agreement, and the potential for deferre d or renegotiated contracts because of declining market prices, higherr production costs and slumpint demand for coal. TECO Coal and TECO Guatemala provide roughly 20 percentr of theparent company’s consolidated earningse before interest, taxes, depreciatio and amortization, Fitch Credit ratios at Tampa Electridc should benefit from higher base rates in 2009 and 2010 as a resulyt of a $138 million rate order approved in March, Fitc said.
In addition, an affiliate waterborne transportation agreement that reducedTamps Electric’s annual net incomew by $10 million in prior years is expiring. Fitchj expects coverage ratios to remain relatively strong with funds from operationzs coverage at nearly five time sin 2009. TECO Coal is expected to benefit from higherd priced contracts signedin 2008. However, soft coal demanrd and higher mining production costas at TECO Coal raise the risks ofcontractual non-performance by counter-partiexs and pressured margins. Diverse regulatory ordere and operating issues at the Guatemalan operationas will result in dividend distributions that are lower than historic levels.
TECO's liquidity positiomn is considered strong, Fitch said. Cash and cash equivalents were $34.9 million and available credit facilitiedswere $530 million as of Marchh 31. Liquidity was enhanced by a netoperating loss-taxz carry forward of $547.5 million as of Dec. 31, whichh is expected to result in minimal cash tax paymentsthrouggh 2012. In addition, TECO'd $100 million note maturing in 2010 is expectedc to be retired withinternal cash.
Positive rating action could resul t in the future from consolidated leverage ratio reduction in 2010 and higherf cash flows from a full year of higher base ratesw in 2010 and effectivecost
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