Calpine Construction lifts term loan to $1.25 billion, trims pricing

By Sara Rosenberg

New York, July 20 – Calpine Construction Finance Co. LP upsized its seven-year covenant-lite term loan B (Ba2/BB+) to $1.25 billion from $1 billion and reduced pricing to SOFR plus 225 basis points from talk in the range of SOFR plus 250 bps to 275 bps, according to a market source.

Also, the original issue discount on the term loan was tightened to 99.25 from 99, the source said.

The term loan still has a 0% floor, 101 soft call protection for six months and amortization of 1% per annum.

Included in the term loan is a put option upon a change of control and ratings event at 101%, subject to a dual-trigger.

Citigroup Global Markets Inc., BMO Capital Markets, BofA Securities Inc., Barclays, BNP Paribas Securities Corp., Mizuho, MUFG, RBC Capital Markets, SMBC, Credit Suisse Securities (USA) LLC, ING and Morgan Stanley Senior Funding Inc. are the joint lead arrangers on the deal. JPMorgan Chase Bank, Truist, Natixis, Credit Agricole, Santander and Societe Generale are co-managers. Credit Suisse is the agent.

Recommitments were scheduled to be due at 2 p.m. ET on Thursday, the source added.

Proceeds will be used to refinance the company’s existing $945 million senior secured term loan B, to pay associated fees and expenses, and, due to the upsizing, to repay a portion of Calpine Corp.’s term loan B-5 due December 2027.

Closing is expected in late July.

Calpine Construction is an owner and operator of power generation capacity.

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