Fitch Assigns TECO Finance, Inc. 'BB+' IDR

--'BB+' Issuer Default Rating (IDR);

--Senior unsecured 'BB+'.

Fitch has also placed TECO Finance's ratings on Rating Watch Positive, as are those of TECO Energy, Inc. (TECO, Fitch IDR 'BB+'). TECO Finance's ratings are based on the unconditional guarantee of TECO.

TECO Finance is a wholly owned finance subsidiary of TECO. Its business activities consist solely of providing funds to TECO for general corporate purposes. As part of TECO's ongoing debt management plan, TECO expects to exchange TECO Energy notes ($1.2 billion) maturing in 2011-2015 with new unsecured notes issued by TECO Finance and extend the maturity on up to $300 million of TECO notes maturing in 2011-2012 to 2017. Completion of the exchange offers will enhance the company's consolidated debt maturity profile.

TECO management also intends to complete $500 million of parent debt retirements. TECO plans to tender $300 million of unsecured parent company notes due 2010 using the proceeds from the sale of TECO Transport Corp. (Transport) by the end of December 2007. The sales transaction is anticipated to close by Dec. 31, 2007. TECO also plans to retire debt obligations not included in the debt tender and exchange offers in 2008. TECO has already retired $110 million of Dock and Wharf bonds at Transport on the maturity date in September 2007 using cash on hand.

TECO Finance's ratings are based on the unconditional and irrevocable guarantee of TECO Finance's obligations by parent company TECO. As a result, both entities have the same IDR. TECO's guarantee will be unsecured and will rank on parity with all of TECO's other unsecured and unsubordinated indebtedness. Also, the $200 million bank revolving agreement, dated May 9, 2007, includes TECO Finance as a borrower and TECO as guarantor.

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