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 hand, to:
- 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 debt.”
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV