By Paul A. Harris
St. Louis, May 12 - Calpine Construction Finance Co. L.P. and CCFC Finance Corp. priced an upsized $1 billion issue of 8% seven-year senior secured notes (B1/BB-) at 95.488 to yield 8 7/8% on Tuesday, according to informed source.
The yield was printed in the middle of the 8¾% to 9% yield talk while the issue price came slightly rich to the discount talk of approximately 5 points of original issue discount.
The deal, which was increased from $800 million, went well but was not as strongly oversubscribed as issues that priced in the recent past, an informed source commented.
Morgan Stanley was the lead bookrunner for the Rule 144A for life notes offer. Credit Suisse, Deutsche Bank Securities and Goldman Sachs & Co. were joint bookrunners.
Proceeds will be used to repay CCFC's existing credit facility and to redeem CCFC's outstanding second-lien notes.
The issuers are subsidiaries of San Jose, Calif.-based power producer, Calpine Corp.
Issuers: Calpine Construction Finance Co., L.P. and CCFC Finance Corp.
Face amount: $1 billion
Proceeds: $954.88 million
Maturity: June 1, 2016
Security: Senior secured notes
| Left bookrunner: | Morgan Stanley
|
| Joint bookrunners: | Credit Suisse, Deutsche Bank, Goldman Sachs & Co.
|
| Co-manager: | ING Financial Markets LLC
|
| Coupon: | 8%
|
| Price: | 95.488
|
| Yield: | 8 7/8%
|
| Spread: | 630 bps
|
| Call features: | Make-whole at Treasuries plus 50 bps until June 1, 2013, then callable at 104.0, 102.0, par on and after June 1, 2015
|
| Equity clawback: | 35% at 108.0 until June 1, 2012
|
| Trade date: | May 12
|
| Settlement date: | May 19
|
| Ratings: | Moody's: B1
|
| Standard & Poor's: BB-
|
| Distribution: | Rule 144A for life
|
| Price talk: | 8¾% to 9% at approximately 5 points of OID
|
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