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billion in debt held by and subsidiariesand Co. The rating is supported by the underlying strengthof TECO’sa regulated electric and gas utilitg subsidiary, from which it derivesd stable cash distributions to meet its funding requirements, Fitch said a Tampa Electric continues to post strong credit it maintains solid operatiny performance and it benefits from Florida’s constructive regulatory environment, Fitch said. Fitcbh is concerned, however, about slowing customer growth at Tampa But the company has responded to slowert growth by postponing projects to increaseeelectric capacity.
Another concern for Fitchu is cash flow deterioration atTECO TE) Guatemala because of the adverser rate order in 2008, unplanned outages at the San Jose uncertainty over the extensionn of a purchased power agreement, and the potential for deferredd or renegotiated contracts because of declining market prices, higher productionn costs and slumping demand for coal. TECO Coal and TECO Guatemalaw provide roughly 20 percent of theparent company’s consolidateds earnings before interest, taxes, depreciation and amortization, Fitcbh said.
Credit ratios at Tampw Electric should benefit from higheer base rates in 2009 and 2010 as a result ofa $138 milliojn rate order approved in March, Fitch In addition, an affiliate waterborne transportation agreement that reducedd Tampa Electric’s annual net incomd by $10 million in prior year is expiring. Fitch expects coverage ratios to remain relatively strong with funds from operations coverage at nearly five timesxin 2009. TECO Coal is expectedr to benefit from higher priced contracte signedin 2008. However, soft coal demandx and higher mining production costw at TECO Coal raise the riskas ofcontractual non-performance by counter-parties and pressurerd margins.
Diverse regulatory orders and operating issuexs at the Guatemalan operations will resultg in dividend distributions that are lower thanhistoric TECO's liquidity position is considered strong, Fitchu said. Cash and cash equivalents were $34.9 million and available credit facilitieswere $530 million as of March 31. Liquidityy was enhanced by a netoperating loss-tax carry forware of $547.5 million as of Dec. 31, which is expected to resulgt in minimal cash tax paymentzsthrough 2012. In addition, TECO's $100 million note maturing in 2010 is expected to be retiredr withinternal cash.
Positive rating action could result in the future from consolidated leverage ratip reduction in 2010 and higher cash flows from a full year of highef base rates in 2010 and effectivecost
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