Calpine tenders, seeks consents for $1.08 billion 7¼% notes due 2017

By Susanna Moon

Chicago, Oct. 17 - Calpine Corp. said it began a cash tender offer and consent solicitation for its $1,079,914,000 outstanding 7¼% senior secured notes due 2017.

The company is soliciting consents to amend the notes to eliminate substantially all of the restrictive covenants and events of default, to release the liens on the collateral securing the notes and to amend the satisfaction and discharge provision of the indenture, according to a press release.

The total purchase price will be $1,041, including a $30 premium, for each $1,000 principal amount of notes tendered by 5 p.m. ET on Oct. 30, the consent date.

Those who tender after the consent deadline will receive $1,011 per $1,000 of notes.

The tender offer will end at 5:00 p.m. ET on Nov. 29.

The company also will pay accrued interest to but excluding the settlement date.

Tendered notes may be withdrawn by the consent deadline.

Holders who tender their notes will be deemed to have delivered the related consents. Holders may not tender notes without delivering the related consents.

The completion of the offer is not conditioned upon any minimum amount of notes being tendered but conditioned on Calpine receiving net proceeds of about $1.14 billion from financing.

Calpine said it plans to launch an offering of senior secured notes and the syndication of a new senior secured term loan facility, with proceeds to be used to fund the tender offer.

Citigroup Global Markets Inc. (800 558-3745 or collect 212 723-6106) is the dealer manager and solicitation agent. D.F. King & Co., Inc. (800 769-7666 or collect 212 269-5550) is the tender agent and the information agent.

Calpine is a Houston-based power producer.

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