(Source: Business Wire)
Fitch Ratings assigns a 'BBB+' rating to the $100 million of 6.10% senior unsecured notes due May 15, 2018, issued by Tampa Electric Company (Tampa Electric). The new notes rank equally with other unsecured debt of Tampa Electric. The proceeds will be used to repay short-term debt and general corporate purposes.
Tampa Electric's ratings reflect its rating linkage with parent company TECO Energy, Inc. (TECO; IDR 'BBB- ' with a Stable Outlook, by Fitch); strong standalone credit metrics; solid operating performance; low industrial concentration; and a constructive regulatory environment in Florida, as evidenced by the recent base rate order and effective periodic rate adjustment mechanisms.
Fitch's ratings concerns relate to slowing sales growth at the utility, a weak regional housing market, and moderating but still higher-than-average parent debt leverage. Tampa Electric's customer growth rate slowed to 0.1% in 2008, from a historical annual average of 2.0%-2.5%, as a result of a contraction in the housing market and the recession. Operating costs are expected to increase in 2009; however, Fitch expects these costs to moderate beyond 2009 as a result of cost controls and cost sharing between the electric and gas utilities.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
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