Calpine to price $750 million eight-year secured notes on Tuesday; initial talk 4½% area

By Paul A. Harris

Portland, Ore., Dec. 10 – Calpine Corp. plans to price a $750 million offering of eight-year senior secured notes (expected ratings Ba2/BB) in a quick-to-market Tuesday trade following a mid-morning conference call with investors, according to market sources.

Initial talk has the deal coming to yield in the 4½% area, a trader said.

Credit Suisse Securities (USA) LLC is the left lead bookrunner. BofA Securities Inc., Barclays, BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Agricole CIB, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, MUFG, Natixis Securities Americas LLC, RBC Capital Markets LLC and SMBC Nikko Securities America Inc. are joint bookrunners. ING Financial Markets LLC is the co-manager.

The Rule 144A and Regulation S notes become callable after three years. A special call would allow the issuer to redeem 10% of notes annually at 103 during non-call period.

The Houston-based power generator plans to use the proceeds to fund the tender and/or redemption of its 6% senior secured notes due 2022.

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