Calpine accepts $139 million 9 5/8% notes in tender offer

By Jennifer Chiou

New York, July 12 - Calpine Corp. said it will buy $138,895,000 or 17.7% of its outstanding 9 5/8% first-priority senior secured notes due 2014 in its tender offer for the securities.

The company began the offer to purchase any and all of its $785 million notes on June 9, offering par plus accrued interest up to but excluding the purchase date.

The offer expired July 8.

Based in San Jose, Calif., the power company now has $646.105 of the notes outstanding and has finished the sale of its remaining U.S. gas assets.

At the time of announcing the tender, Calpine said that it had begun selling its remaining U.S. gas assets and noted that a sale would require the company to use the proceeds to tender for the notes under the terms of the indenture unless the money is put to another permitted use.

Proceeds remaining from the pending sale after the tender offer will be used to acquire new assets.

If Calpine does not acquire the new assets within 180 days of receiving the net proceeds, any remaining proceeds over $50 million must be used to offer to buy back some of its $3.68125 billion of second-lien secured debt.

Merrill Lynch & Co. is the dealer manager (888 654-8637 or call collect 212 449-4914). The Bank of New York is the tender agent and MacKenzie Partners, Inc. is the information agent (800 322-2885 or call collect 212 929-5500).

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