Published on 12/2/2020 in the Prospect News High Yield Daily.
New Issue: Calpine prices downsized $900 million 10.25-year secured notes at par to yield 3¾%
By Paul A. Harris
Portland, Ore., Dec. 2 – Calpine Corp. priced a downsized $900 million issue of 10.25-year senior secured notes (Ba2/BB+) at par to yield 3¾% in a Wednesday drive-by, according to market sources.
The issue size decreased from $1 billion with the shift of $100 million to the bank loan, which increased to $1 billion from $750 million.
The notes price on top of yield talk. The bond deal was heard to be playing to $1.6 billion of orders early Wednesday afternoon.
J.P. Morgan Securities LLC was at the left of a syndicate of bookrunners that also included Barclays, BNP Paribas Securities Corp., BofA Securities Inc., Citigroup Global Markets Inc., Credit Agricole CIB, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, MUFG, Natixis Securities Americas LLC, RBC Capital Markets LLC, SMBC Nikko Securities America LLC and Credit Suisse Securities (USA) LLC.
The Houston-based company, which uses natural gas and geothermal resources to generate electricity, plans to use the proceeds, together with cash on hand if necessary, to pay down its first-lien term loan due 2024 and fund the tender/redemption of its outstanding 5¼% senior secured notes due 2026.
| Issuer: | Calpine Corp.
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| Amount: | $900 million, decreased from $1 billion
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| Maturity: | March 1, 2031
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| Securities: | Senior secured notes
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| Bookrunners: | J.P. Morgan Securities LLC, Barclays, BNP Paribas Securities Corp., BofA Securities Inc., Citigroup Global Markets Inc., Credit Agricole CIB, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, MUFG, Natixis Securities Americas LLC, RBC Capital Markets LLC, SMBC Nikko Securities America LLC and Credit Suisse Securities (USA) LLC
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| Coupon: | 3¾%
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| Price: | Par
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| Yield: | 3¾%
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| Spread: | 280 bps
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| Call protection: | 5.25 years
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| Trade date: | Dec. 2
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| Settlement date: | Dec. 16
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| Ratings: | Moody’s: Ba2
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| S&P: BB+
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 3¾%
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| Marketing: | Drive-by
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