Fitch lifts TECO Energy view to positive

Fitch Ratings said it revised the long-term outlook of TECO Energy, Inc. and its main operating subsidiary Tampa Electric Co. to positive from stable to reflects the agency's expectation that TECO's leverage and business risk will continue to trend downward due to debt repayments and an increasing proportion of consolidated revenues generated by lower-risk regulated utilities following growth of the utilities and the planned sale of TECO Transport.

Business risk has been lowered during the past few years through the wind-down of merchant power operations, parent company debt has been reduced by $157 million since December 2006, TECO Energy plans to retire $300 million of parent debt maturing in May 2007 using cash on hand and TCO has committed to an additional $500 million of early redemptions of parent-level debt, which will be accelerated from no later than the end of 2010 to the end of 2008 if TECO Transport is sold according to plan.

In Fitch's view, credit metrics are likely to be restored to investment-grade levels within two years.

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