Calpine gets second extension on credit facilities as final terms are negotiated on $1 billion loan

By Sara Rosenberg

New York, June 17 - Calpine Corp. received another extension from the bank groups on its two working capital facilities totaling $950 million, this time through June 24. Previously the bank group had agreed to extend the facilities to June 16.

The San Jose, Calif. power company said the extension will give it enough time to finalize terms on a new two-year $1 billion working capital facility.

Furthermore, upon completion of a term sheet for the $1 billion facility, the banks have provided an automatic extension to July 16 so as to provide enough time to complete definitive documentation, according to a news release.

The company announced about a month ago that it is involved in final discussions with its bank group about refinancing its $950 million revolving working capital facilities, with the main focus of the negotiations revolving around how long the extension would be.

At the time of the call, the company expressed its intention to refinance the $1 billion revolver prior to the May 24 maturity date and admitted to being optimistic about completing this task. However, it is apparent that the company needed a bit more time and managed to gain it through the two extensions.

The main crux of the negotiations has been whether the lenders will extend the revolver for one year or two years, company officials explained at the time of the call, adding that they were hoping for the two-year extension.

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