Calpine sale increases liquidity and volatility

NEW YORK, Aug. 5, 2003 — Standard & Poor’s Ratings Services concludes that Calpine’s announced plan to sell its unconsolidated, 50% interest in the 240-MW Gordonsville Power Plant to Dominion Virginia Power will slightly strengthen liquidity at the expense of some long-term revenue stability.

However, this is in keeping with Calpine’s stated plan to sell some of its qualifying facilities to boost liquidity and is factored into the current ratings. Under the terms of the transaction, Calpine will receive a $31.5 million cash payment, which includes a $26 million payment from Dominion and a separate $5.5 million payment from the project for return of a debt service reserve.

Calpine’s 50% share of the project’s non-recourse debt at closing was approximately $44 million. The company expects to complete the transaction in the fourth quarter of 2003, pending regulatory and other third-party approvals.

The Gordonsville facility provides electricity to Dominion under power sales agreements ending in 2024.


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