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Calpine Corporation Announces Cash Tender Offers for its 5.500% Senior Notes due 2024 and 5.750% Senior Notes due 2025 and Consent Solicitation to Amend the 2024 Senior Notes Indenture

 

HOUSTON--(BUSINESS WIRE)-- Calpine Corporation today announced that it has commenced cash tender offers to purchase (i) any and all of its outstanding 5.500% Senior Notes due 2024 (CUSIP No.131347 CJ3) (the “2024 Notes”) and (ii) up to $741,000,000 in maximum payment amount of its 5.750% Senior Notes due 2025 (CUSIP No.131347 CF1) (the “2025 Notes” and, together with the 2024 Notes, the “Notes”) from holders of each series of Notes (the “Offers”) and solicitation of consents from holders of the 2024 Notes (the “2024 Consent Solicitation”) to effect certain proposed amendments to the indenture governing the 2024 Notes (the “2024 Indenture”). These amendments would (i) eliminate certain of the restrictive covenants and related provisions contained in the 2024 Indenture and (ii) shorten the notice period requirement for optional redemptions. The terms and conditions of the Offers and 2024 Consent Solicitation are described in an Offer to Purchase, dated July 27, 2020 (the “Offer to Purchase”).

The following table summarizes the pricing terms of the Offers and 2024 Consent Solicitation:

Dollars per $1,000 Principal Amount of Notes
Title of Securities CUSIP Aggregate
Principal
Amount
Outstanding
Maximum
Payment
Amount
Tender Offer
Consideration(1)
Early
Tender
Payment(2)
Total
Consideration(1)(2)
5.500% Senior Notes due 2024      131347 CJ3      $472,041,000 N/A $985.35 $30.00 $1,015.35
5.750% Senior Notes due 2025 131347 CF1 $1,182,500,000      $741,000,000       $998.75 $30.00 $1,028.75
___________________
(1) Does not include accrued and unpaid interest from the last interest payment date to, but not including, the applicable settlement date.
(2) The applicable Total Consideration includes the applicable Early Tender Payment for related Notes tendered (and not withdrawn) at or prior to the applicable Early Tender Date.

The Offers and 2024 Consent Solicitation will expire at 11:59 p.m., New York City Time, on August 21, 2020, unless extended or earlier terminated (the “Expiration Date”). The consideration for each $1,000 principal amount of Notes validly tendered and not withdrawn at or prior to 5:00 p.m. New York City Time on August 7, 2020, unless extended (the “Early Tender Date”), and accepted for purchase pursuant to the Offers will be the Total Consideration set forth in the table above. The consideration for each $1,000 principal amount of Notes validly tendered after the Early Tender Date and at or prior to the Expiration Date and accepted for purchase pursuant to the Offers will be the Tender Offer Consideration set forth in the table above, which consists of the Total Consideration less the Early Tender Payment set forth in the table above. Holders of Notes tendered after the Early Tender Date will not be eligible to receive the related Early Tender Payment. No additional consideration is payable for a consent in the 2024 Consent Solicitation but the 2024 Tender Offer Consideration also constitutes consideration for the consent.

Holders of Notes validly tendered and accepted for purchase pursuant to the Offers will receive the applicable consideration described above, plus accrued and unpaid interest from the last interest payment date applicable to such Notes to, but not including, the applicable settlement date.

If the aggregate principal amount of 2025 Notes validly tendered exceeds the amount that the Calpine Corporation could purchase for the Maximum Payment Amount, Calpine Corporation, if it accepts for purchase any 2025 Notes under such circumstances, will accept for purchase only an aggregate principal amount of 2025 Notes such that the Maximum Payment Amount is not exceeded. In such circumstance, the amount of 2025 Notes purchased will be prorated, with the aggregate principal amount of each 2025 Holder’s validly tendered 2025 Notes accepted for purchase determined by multiplying each holder’s tender by a proration factor, and rounding the product down to the nearest $1,000. Furthermore, if the 2025 Offer is fully subscribed as of the Early Tender Date, holders who validly tender 2025 Notes following the Early Tender Date will not have any of their 2025 Notes accepted for purchase.

Notes tendered and Consents delivered may be withdrawn or revoked at any time prior to 5:00 p.m., New York City time, on August 7, 2020 (with respect to each series of Notes, the “Withdrawal Date”). Holders of Notes who tender their Notes and deliver their Consents after the Withdrawal Date, but at or prior to the Expiration Date, may not withdraw their tendered Notes and delivered related Consents. Holders of 2024 Notes who validly tender their 2024 Notes will be deemed to have validly delivered the related Consents. Holders of 2024 Notes may not tender 2024 Notes without delivering the related Consents.

The consummation of the Offers and 2024 Consent Solicitation is not conditioned upon any minimum amount of Notes being tendered, but is subject to, and conditioned upon, the satisfaction or waiver of certain conditions described in the Offer to Purchase, including, among others, Calpine Corporation consummating an offering of debt securities. Calpine Corporation intends to use net proceeds thereof, together with cash on hand, to fund the aggregate consideration for all Notes validly tendered (and not validly withdrawn) pursuant to the Offers and accepted for purchase, and to pay all fees and expenses incurred in connection with the Offers and 2024 Consent Solicitation. On the applicable Early Settlement Date, if any, Calpine Corporation will pay the consideration due with respect to related Notes accepted for payment on such date.

Credit Suisse Securities (USA) LLC has been retained as the dealer manager. D.F. King & Co., Inc. has been retained to serve as both the tender agent and the information agent. Persons with questions regarding the Offer and the 2024 Consent Solicitation should contact Credit Suisse Securities (USA) LLC at (800) 820-1653 (toll free) or (212) 325-2476 (collect). Copies of the Offer to Purchase and other related materials may be obtained online at www.dfking.com/calpine or by contacting D.F. King & Co., Inc. at (toll-free) (800) 431-9646 or (collect) (212) 269-5550 or email: calpine@dfking.com.

None of Calpine Corporation or its affiliates, its board of directors, the dealer manager, the tender agent and the information agent or the trustee for the Notes makes any recommendation as to whether holders of the Notes should tender or refrain from tendering the Notes.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes or to buy or sell any other securities. The Offers and the 2024 Consent Solicitation are made only through the Offer to Purchase. The Offers and the 2024 Consent Solicitation are not being made to holders of Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky and other laws of such jurisdiction. In any jurisdiction in which the Offers and the 2024 Consent Solicitation are required to be made by a licensed broker or dealer, the Offers and the 2024 Consent Solicitation will be deemed to be made on behalf of Calpine Corporation by the dealer manager or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

About Calpine

Calpine Corporation is America’s largest generator of electricity from natural gas and geothermal resources with operations in competitive power markets. Our fleet of 77 power plants, including one under construction, represents over 26,000 megawatts of generation capacity. Through wholesale power operations and our retail businesses, Calpine Energy Solutions and Champion Energy, we serve customers in 23 states in the United States and in Canada and Mexico. Our clean, efficient, modern and flexible fleet uses advanced technologies to generate power in a low-carbon and environmentally responsible manner. We are uniquely positioned to benefit from the secular trends affecting our industry, including the abundant and affordable supply of clean natural gas, environmental regulation, aging power generation infrastructure and the increasing need for dispatchable power plants to successfully integrate intermittent renewables into the grid.

Forward-Looking Information

In addition to historical information, this release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as “believe,” “intend,” “expect,” “anticipate,” “plan,” “may,” “will,” “should,” “estimate,” “potential,” “project” and similar expressions to identify forward-looking statements. Such statements include, among others, those concerning our expected financial performance and strategic and operational plans, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. We believe that the forward-looking statements are based upon reasonable assumptions and expectations. However, you are cautioned that any such forward-looking statements are not guarantees of future performance and that a number of risks and uncertainties could cause actual results to differ materially from those anticipated in the forward-looking statements. Please see the risks identified in this release or in Calpine’s reports and registration statements filed with the Securities and Exchange Commission, including, without limitation, the risk factors identified in its Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020. These filings are available by visiting the Securities and Exchange Commission’s website at www.sec.gov or Calpine’s website at www.calpine.com. Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. Many of these factors are beyond our ability to control or predict. Our forward-looking statements speak only as of the date of this release. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and, other than as required by law, Calpine undertakes no obligation to update or revise any such statements, whether as a result of new information, future events, or otherwise. 

Media Contact:

Investor Contact:

Brett Kerr

Vice President, External Affairs

W. Bryan Kimzey

Senior Vice President, Finance & Treasurer

713-830-8809

713-830-8775

brett.kerr@calpine.com

bryan.kimzey@calpine.com