Calpine Closes $835 Million Senior Secured Term Loan
Secures Lower Interest Rate and Further Simplifies Capital Structure
HOUSTON -- October 09, 2012
Calpine Corporation (NYSE: CPN) announced today that it has closed on an $835
million first lien senior secured term loan (“Term Loan”). The Term Loan,
which amortizes at a rate of 1% per year, bears interest at LIBOR plus 3.25%
per annum (subject to a LIBOR floor of 1.25%) and matures in 2019.
Calpine intends to utilize the proceeds of the Term Loan, along with cash on
*Refinance the currently callable portion of each of its outstanding
corporate-level Senior Secured Notes, including approximately $590 million
of principal, as well as accrued interest, fees and call premiums, and
*Retire its project-level BRSP term loan facility, which includes the
repayment of approximately $218 million of principal as well as accrued
interest and fees.
The company’s Senior Secured Notes are scheduled to mature between 2017 and
2023 and bear interest at fixed rates of between 7.25% and 8.00%. Meanwhile,
the BRSP term loan, which has now been fully retired, was scheduled to mature
in 2014 and bore interest at LIBOR plus 4.50% per annum (subject to a LIBOR
floor of 3.00%). The BRSP term loan was previously secured by the company’s
Broad River and South Point Energy Centers.
“This refinancing is consistent with our stated goal of opportunistically
accessing the capital markets,” said Todd Thornton, Calpine’s Treasurer and
Vice President of Finance. “As a result of this transaction, we have exchanged
higher-cost fixed rate debt for lower-cost floating rate debt, resulting in
expected annual interest savings of approximately $25 million, which is
accretive to Adjusted Recurring Free Cash Flow Per Share. In addition, we have
further simplified our capital structure by removing a complicated project
finance facility from our balance sheet. Going forward, we will continue to
seek similar opportunities to reduce interest payments and streamline our
Morgan Stanley, Barclays, Deutsche Bank and Royal Bank of Canada acted as lead
arrangers on the transaction.
Calpine Corporation is the largest independent power producer in the U.S.,
with a fleet of 93 power generation plants representing more than 28,000
megawatts of generation capacity. Last year our plants generated more than 94
million megawatt hours of power for our wholesale customers in 20 states and
Canada. Our 91 operating plants as well as two under construction consist
primarily of natural gas-fired and renewable geothermal power plants that use
advanced technologies to generate power in a low-carbon and environmentally
responsible manner. Our modern, clean, efficient and cost-effective fleet
stands ready to respond to the increased need for cleaner and more affordable
power as the economy recovers, as new environmental rules are implemented and
force older, dirtier plants to retire or reduce generation, as variable
renewable power generation from wind and solar grows and with it the need for
flexible natural gas generation to assure firm supply to the grid, and
finally, as natural gas becomes economically competitive with coal as a fuel
for power generation. Please visit www.calpine.com to learn more about why
Calpine is a generation ahead - today.
In addition to historical information, this release contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Words such as “believe,” “intend,” “expect,” “anticipate,” “plan,” “may,”
“will” and similar expressions identify forward-looking statements. Such
statements include, among others, those concerning expected financial
performance and strategic and operational plans, as well as assumptions,
expectations, predictions, intentions or beliefs about future events. You are
cautioned that any such forward-looking statements are not guarantees of
future performance and that a number of risks and uncertainties could cause
actual results to differ materially from those anticipated in the
forward-looking statements. Please see the risks identified in this release or
in Calpine’s reports and registration statements filed with the Securities and
Exchange Commission, including, without limitation, the risk factors
identified in its Annual Report on Form 10-K for the year ended Dec. 31, 2011.
These filings are available by visiting the Securities and Exchange
Commission’s website at www.sec.gov or Calpine’s website at www.calpine.com.
Actual results or developments may differ materially from the expectations
expressed or implied in the forward-looking statements, and Calpine undertakes
no obligation to update any such statements.
Norma F. Dunn, 713-830-8883 (Media Relations)
Bryan Kimzey, 713-830-8775 (Investor Relations)
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