Calpine completes solicitation to amend some note covenants

New York, April 26 - Calpine Corp. (Caa1/CCC+) said it has successfully completed its previously announced consent solicitation to amend the indentures of its 10½% senior notes due 2006, its 8¾% senior notes due 2007, its 7 7/8% senior notes due 2008, its 7 5/8% senior notes due 2006 and its 7¾% senior notes due 2009.

The consent solicitation expired as scheduled at 5 p.m. ET on April 23, without extension.

As previously announced, Calpine, a San Jose, Calif.-based power generating company, said on April 12 that it had begun a consent solicitation to amend the indentures of its 10½% notes, 8¾% notes, 7 7/8% notes, 7 5/8% notes and 7¾% notes, which had all been issued between 1996 and 1999.

It said the consent solicitation would expire at 5 p.m. ET on April 23, subject to possible extension.

Calpine said that it was looking to make the indentures match those of its non-convertible debt issued in 2003.

Calpine said that among other things, the amendments would give its subsidiaries greater flexibility to: incur liens to secure obligations arising under power and fuel contracts and contracts for commercial and trading activities in the ordinary course of business; issue preferred for financing and asset monetization transactions, provided the proceeds of any issuance would be used in the same manner as though the subsidiary had issued nonrecourse project debt; and agree to restrictions on dividends and related restrictive covenants in connection with certain types of approved financing and commercial transactions.

The company said that holders giving consents would receive a consent fee of $5 per $1,000 principal amount, with approval requiring consent from holders of at least a majority of the outstanding principal amount of each series of notes.

Goldman, Sachs & Co. was the solicitation agent (877 686-5059). Bondholder Communications Group was the information agent (contact Carmella Casanova at 888 385-2663).

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