TECO up on credit commitment

The Tampa utility's battered shares surges $2.46 to $12.95 on word that deals are in the works for needed financing.

By LOUIS HAU, Times Staff Writer
© St. Petersburg Times
published November 12, 2002

TAMPA -- TECO Energy Inc. said Monday it was making progress in securing needed financing, and that helped lift the company's battered shares off their lowest levels in a decade and a half.

The Tampa utility said it had obtained written commitments for the renewal of a $300-million credit line for its Tampa Electric Co. unit that is due to expire Wednesday. The company also said it was moving ahead with plans for a $240-million bond offering after Moody's Investors Service and Standard & Poor's agreed not to further lower TECO's debt ratings for the offering.

The announcement helped pull TECO shares off Friday's 15-year closing low of $10.49, adjusting for stock splits. TECO's shares finished Monday at $12.95, up $2.46 or 23.5 percent.

The shares remain more than 55 percent off their 52-week high of $29.05 set on April 23 due to0persistent concerns about the company's troubled wholesale power business. The stock was most recently hit by downgrades by UBS Warburg, which cut its rating on TECO Thursday to "hold" from "buy," and Merrill Lynch, which placed a "sell" recommendation on the stock, down from a previous "neutral" rating.

TECO said the bond offering will be a refinancing under which existing TECO Energy bonds will be exchanged for bonds with a longer maturity.

The company said a separate $300-million TECO Energy credit line that is also set to expire Wednesday isn't expected to be renewed and will likely be converted into a loan that the company will have another year to pay off.

TECO chairman and chief executive Robert Fagan said in a statement that the company had made progress in completing a financial plan announced in September.

Chief financial officer Gordon Gillette said in the statement that TECO was releasing an update to put to rest the "misinformation, rumor and misunderstanding in the markets" and analysts' reports that "have taken a less favorable outlook on our progress than we believe is warranted."

TECO executives are expected to provide further reassurances in a special presentation for shareholders tentatively scheduled for Dec. 2 at the Crowne Plaza Hotel in Tampa at 700 N West Shore Blvd. The conference, which will be hosted by Robert W. Baird & Co., is expected to include presentations by company executives and Baird utility analyst Dave Parker, one of the most enthusiastic TECO bulls on Wall Street. A question-and-answer session is expected.

-- Louis Hau can be reached at hau@sptimes.com or (813) 226-3404.

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