Caithness Coso again extends tender offer for 6.263% notes, 5.489% bonds

By Angela McDaniels

Seattle, Oct. 25 - Caithness Coso Funding Corp. said it extended the tender offer for its $90 million 6.263% subordinated secured notes due 2014 and its $375 million of 5.489% senior secured bonds due 2019 to 9 a.m. ET on Nov. 27.

The offer was originally set to expire on Oct. 16 and was previously extended to Oct. 25 and then to Nov. 1. It began on Sept. 18.

In addition, the price determination date was pushed back to 2 p.m. ET on Nov. 13. The company originally planned to set pricing on Oct. 1, and the date was changed to Oct. 11 and then to Oct. 25.

As of 5 p.m. ET on Oct. 24, the company had received tenders and consents for all of the 6.263% notes and for $355 million, or 94.67%, of the 5.489% bonds, unchanged from the consent deadline on Oct. 1.

The consents allowed the company to execute supplemental indentures, which will go into effect once Caithness Coso buys the tendered bonds.

The amendments in the supplemental indentures will eliminate substantially all of the restrictive covenants, eliminate some events of default, waive the change-of-control offer provisions and waive the notice provisions required in connection with an optional redemption to allow Caithness Coso the flexibility to promptly redeem notes.

As previously announced, for each $1,000 principal amount, the company will calculate its payout using the 4¾% Treasury due March 31, 2011 for the 6.263% notes and the 3 7/8% Treasury due Feb. 15, 2013 for the 5.489% bonds as well as a fixed spread of 50 basis points, minus accrued interest up to but excluding the settlement date multiplied by a scaling factor for principal amortization.

The company announced on Oct. 1 that all holders who tender will receive the consent payment of $20 per $1,000 principal amount, whether or not they tendered by the consent deadline.

As previously announced, under a purchase and sale agreement among certain owners of Caithness Energy LLC, certain subsidiaries of Caithness Energy and ArcLight Renewco Holdings, LLC, ArcLight has agreed to acquire a 100% direct ownership interest in Coso Finance Partners, Coso Energy Developers, Coso Power Developers, Coso Land Co., China Lake Joint Venture, New CLPSI Co., LLC, New RVPI Co., LLC and Coso Hay Ranch, LLC.

ArcLight will also have a 100% indirect ownership interest in the company and Coso Transmission Line Partners.

The offer is conditioned on the closing of the acquisition as well as sufficient financing.

Citi (212 723-6106 or 800 558-3745) is the dealer manager and solicitation agent. Global Bondholder Services Corp. (212 430-3774 or 866 470-4200) is the information agent and depositary.

Caithness Coso is a special-purpose entity formed by Caithness Energy, a privately held independent energy company with headquarters in New York.

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