San Jose, CA, March 7, 2007 — Calpine Corporation announced that it has received from the U.S. Bankruptcy Court for the Southern District of New York a written opinion that will allow the company to proceed with its plans for a $5 billion replacement debtor-in-possession credit facility (replacement DIP facility).
If the company is successful in completing the refinancing, the replacement DIP facility will be used to refinance the company’s existing $2.0 billion DIP financing; to repay approximately $2.5 billion of secured debt at Calpine Generating Company LLC (CalGen); and for working capital and other general corporate purposes.
Credit Suisse, Goldman Sachs, JPMorgan and Deutsche Bank will act as co-lead arrangers for Calpine’s replacement DIP facility. The proposed new facility is expected to close within the next 30 days and will consist of:
* A $4 billion senior secured term loan;
* A $1 billion senior secured revolving credit facility;
* A $2 billion expansion option;
* The ability to provide liens to counterparties to enhance Calpine’s hedging program; and
* A rollover option that allows, but does not obligate, Calpine to convert the replacement DIP into an exit financing.
Upon completion, the replacement DIP facility will remain in place until the earlier of an effective plan of reorganization or the second anniversary of the closing date of the replacement DIP facility. If the replacement DIP facility is converted to an exit financing, the final maturity will be seven years from the closing date of the replacement DIP facility. The replacement DIP facility will be secured by substantially all of the assets which secure the existing $2.0 billion DIP facility, liens on all of Calpine’s unencumbered assets, and junior liens on all encumbered assets of Calpine and its debtor subsidiaries. The court’s written opinion also stated that the CalGen lenders have an unsecured claim for an amount that is presently estimated as approximately $76 million.
For related articles on the continuing Calpine bankruptcy and recovery, please read these articles: