Calpine to bring roughly $1 billion high-yield deal as part of $2.3 billion refinancing

By Paul A. Harris

St. Louis, Feb. 4 - Calpine Generating Co. LLC plans to sell about $1 billion of non-recourse second priority secured notes, the company said Wednesday in a news release.

Deutsche Bank Securities will run the books on the Rule 144A bond deal as well as the company's approximately $1.3 billion first priority senior secured term loans, according to a syndicate source.

CalGen intends to use the net proceeds from the offerings to refinance amounts outstanding under its $2.5 billion Calpine Construction Finance Co. II LLC credit facility that matures in November. Current outstanding debt and letters of credit under the CCFC II credit facility are about $2.3 billion.

CalGen also expects to establish a $200 million three-year revolver, which is expected to be used to complete CalGen's power generation facilities that are still under construction, among other possible uses.

No additional details were immediately available on the bond offering.

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