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Calpine tenders for 7 7/8%, 7˝% notes, plans to repurchase 8% notes
By Jennifer Chiou
New York, July 8 – Calpine Corp. announced the launch of its cash tender offer for any and all of its outstanding 7 7/8% senior secured notes due 2020 and 7˝% senior secured notes due 2021.
According to a 424B3 filing with the Securities and Exchange Commission, the company is also soliciting consents to certain proposed amendments to the indentures governing the notes.
The offer and solicitations will end at midnight ET on Aug. 4.
Calpine also said it is in discussions with holders of its $320 million of 8% senior secured notes due 2019 to repurchase of some or all of those notes.
In the tender offer, the company is offering a total consideration of $1,105.71 per $1,000 principal amount of 7 7/8% notes and $1,114.29 per $1,000 principal amount of 7˝% notes, both including a consent payment of $30.00.
Calpine will also pay accrued interest up to, but not including, the settlement date.
The company is soliciting consents to eliminate substantially all of the restrictive covenants, certain events of default and related provisions in the note indentures and release the liens on the collateral securing the notes.
The Houston-based power company said it intends to redeem any notes that remain outstanding following the tender offer.
In other news, the company plans to amend its existing credit agreement with Goldman Sachs Bank USA as administrative agent to provide for an aggregate amount of incremental revolving facilities amounting to up to $500 million.
Proceeds from the company’s planned $2.8 billion offering of notes due 2023 and 2025 will be used to fund the tender offer and the potential repurchase of the 8% notes.
The company has the option to redeem some or all of the 8% notes at a make-whole price.
Affiliates of Goldman, Sachs & Co. hold all of the outstanding 8% notes.
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