Calpine Energy Management gets new $250 million letter-of-credit facility

By Sara Rosenberg

New York, Aug. 5 - Calpine Energy Management, a new entity created by Calpine Corp. to facilitate short-term gas and power purchases and sales transactions, closed on a new $250 million letter-of-credit facility due October 2005. Deutsche Bank is the lead bank on the deal.

Receivables generated through power sales will serve as collateral to support the letters of credit.

"With Calpine's years of experience in the energy market, together with Deutsche Bank's financial services capabilities, Calpine Energy Management can create short-term contracts with AA- credit to better meet our customers' and suppliers' needs," chief financial officer Bob Kelly said in a company news release.

"This facility will also enable Calpine to increase working capital by matching our payments for gas purchases with the receipt of cash from the sale of power. Equally important, it will enhance our margins through an expansion of our power and gas customer base."

Calpine is a San Jose, Calif., power company.

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