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CALPINE : Entry into a Material Definitive Agreement, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K)

07/22/2014 | 04:19pm US/Eastern
ITEM 1.01 - ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On July 22, 2014, Calpine Corporation, a Delaware corporation (the "Company"),
announced the closing of its previously announced public offering of (i) $1.250
billion principal amount of its 5.375% Senior Notes due 2023 (the "2023 Notes")
and (ii) $1.550 billion principal amount of its 5.750% Senior Notes due 2025
(the "2025 Notes" and, together with the 2023 Notes, the "Notes"). The Notes
have been registered under the Securities Act of 1933, as amended, pursuant to a
registration statement on Form S-3ASR (File No. 333-197288) previously filed
with the Securities and Exchange Commission.
The Notes are the Company's general senior unsecured obligations, are not
guaranteed by any of the Company's subsidiaries, rank equally in right of
payment with the Company's existing and future senior unsecured indebtedness and
senior to the Company's future subordinated debt and are effectively
subordinated to all liabilities of the Company's subsidiaries and to all of the
Company's secured indebtedness to the extent of the value of the collateral
securing such indebtedness.
The net proceeds received by the Company from the sale of the Notes were
approximately $2.761 billion, after deducting the underwriting discount and
estimated offering expenses. The Company intends to use the net proceeds of this
offering, together with cash on hand (if necessary), to (i) repurchase all of
the Company's 8% Senior Secured Notes due 2019 (the "2019 Notes"), (ii) purchase
pursuant to tender offers and consent solicitations and/or redeem, the
outstanding principal amount of the Company's 7.875% Senior Secured Notes due
2020 (the "2020 Notes") and 7.50% Senior Secured Notes due 2021 (the "2021
Notes") and (iii) pay premiums, fees and expenses relating to the purchase and
redemption of existing secured notes described above.
On July 21, 2014, after receiving the requisite applicable consents in the
tender offers and related consent solicitations relating to its 2020 Notes and
2021 Notes, the Company, the guarantors party thereto and Wilmington Trust
Company, as trustee, executed supplemental indentures to the indenture governing
the 2020 Notes and the indenture governing the 2021 Notes. As previously
disclosed, each supplemental indenture eliminates substantially all of the
restrictive covenants, certain events of default and related provisions
contained in the indenture governing the 2020 Notes or the 2021 Notes, as
applicable, with respect to any such notes that remain outstanding after
consummation of the applicable tender offer and related consent solicitation,
release the liens on the collateral securing the 2020 Notes or the 2021 Notes,
as applicable, and amend the satisfaction and discharge provision of the related
indenture. This summary of the terms of the supplemental indentures is qualified
in its entirety by reference to the supplemental indentures, copies of which are
attached as Exhibits 4.1 and 4.2 to this Current Report on Form 8-K and
incorporated by reference herein.
The Notes were issued pursuant to an Indenture, dated July 8, 2013 (the "Base
Indenture"), between the Company and Wilmington Trust, National Association, as
Trustee (the "Trustee"), as supplemented by (i) the First Supplemental
Indenture, dated July 22, 2014, between the Company and the Trustee (the "First
Supplemental Indenture"), relating to the 2023 Notes and (ii) the Second
Supplemental Indenture, dated as of July 22, 2014, between the Company and the
Trustee (the "Second Supplemental Indenture" and, together with the First
Supplemental Indenture and the Base Indenture, the "Indenture"), relating to the
2025 Notes. Capitalized terms used in this current report and not defined herein
have the meanings ascribed to them in the Indenture.
Interest on the Notes is payable semi-annually in arrears on April 15 and
October 15 of each year, commencing on April 15, 2015. The 2023 Notes mature on
January 15, 2023, and the 2025 Notes mature on January 15, 2025.
Optional Redemption of 2023 Notes
On or after October 15, 2018, the Company may on any one or more occasions
redeem all or a part of the 2023 Notes upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest, if any, on the 2023
Notes redeemed, to but excluding the applicable redemption date, if redeemed
during the 12-month period beginning on October 15 of the years indicated below
(subject to the rights of holders of 2023 Notes on the relevant record date to
receive interest on the relevant interest payment date):

Year                Percentage
2018                102.688%
2019                101.344%

2020 and thereafter 100.000%

At any time prior to October 15, 2017, up to 35% of the 2023 Notes issued under the Indenture may be redeemed with the proceeds from certain equity offerings, upon not less than 30 nor more than 60 days' notice, at 105.375% plus accrued and unpaid interest, if any, to, but not including, the redemption date.

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At any time prior to October 15, 2018, the Company may on any one or more occasions redeem all or a part of the 2023 Notes, upon not less than 30 nor more than 60 days' prior notice, at a redemption price equal to 100% of the principal amount of 2023 Notes redeemed, plus the Applicable Premium (as defined in the First Supplemental Indenture) as of, and accrued and unpaid interest, if any, to but excluding the redemption date, subject to the rights of holders of 2023 Notes on the relevant record date to receive interest due on the relevant interest payment date.

Optional Redemption of 2025 Notes

On or after October 15, 2019, the Company may on any one or more occasions redeem all or a part of the 2025 Notes upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, if any, on the 2025 Notes redeemed, to but excluding the applicable redemption date, if redeemed during the 12-month period beginning on October 15 of the years indicated below (subject to the rights of holders of 2025 Notes on the relevant record date to receive interest on the relevant interest payment date):


Year                Percentage
2019                102.875%
2020                101.917%
2021                100.958%

2022 and thereafter 100.000%

At any time prior to October 15, 2017, up to 35% of the 2025 Notes issued under the Indenture may be redeemed with the proceeds from certain equity offerings, upon not less than 30 nor more than 60 days' notice, at 105.750% plus accrued and unpaid interest, if any, to, but not including, the redemption date.

At any time prior to October 15, 2019, the Company may on any one or more occasions redeem all or a part of the 2025 Notes, upon not less than 30 nor more than 60 days' prior notice, at a redemption price equal to 100% of the principal amount of 2025 Notes redeemed, plus the Applicable Premium (as defined in the Second Supplemental Indenture) as of, and accrued and unpaid interest, if any, to but excluding the redemption date, subject to the rights of holders of 2025 Notes on the relevant record date to receive interest due on the relevant interest payment date.

Indenture


The Indenture contains covenants that limit, among other things, the ability of
(i) the Company to incur liens on any Principal Property (as defined in the
Indenture) securing indebtedness for borrowed money unless the Notes of the
applicable series then outstanding are secured by such lien equally and ratably
with such indebtedness and (ii) the Company to consolidate with or merge into
any other entity or sell, assign, convey, transfer, lease or otherwise dispose
of all or substantially all of the properties or assets of the Company and its
Subsidiaries, taken as a whole, to another entity. Under certain events of
default, including, without limitation, failure to pay when due any principal
amount or certain cross defaults to other instruments, either the Trustee or the
Holders of at least 25% in principal amount of the outstanding Notes of the
applicable series may declare the principal amount of the Notes of the
applicable series to be due and payable immediately. In the case of certain
events of bankruptcy or insolvency of the Company or any Material Subsidiary,
the principal amount of the Notes of the applicable series will be automatically
due and payable immediately.
The foregoing description of the issuance and sale of the Notes and the terms
thereof does not purport to be complete and is qualified in its entirety by
reference to the Base Indenture, the First Supplemental Indenture and the Second
Supplemental Indenture, attached hereto as Exhibits 4.3, 4.4, and 4.5,
respectively, and incorporated herein by reference. The forms of Notes, which
are included as part of the First Supplemental Indenture and the Second
Supplemental Indenture, are attached hereto as Exhibits 4.6 and 4.7, and
incorporated herein by reference.
The underwriters and their affiliates have engaged in, and may in the future
engage in, investment banking and other commercial dealings with the Company or
its affiliates. They have received, and may in the future receive, customary
fees and commissions for these transactions. Affiliates of Goldman, Sachs & Co.,
one of the underwriters in the offering of the Notes, hold all of the Company's
outstanding 2019 Notes. Affiliates of certain of the underwriters may also hold
the Company's 2020 Notes and/or 2021 Notes. Because the net proceeds from the
offering were or will be used to repay indebtedness under 2019 Notes, 2020 Notes
. . .


ITEM 7.01 - REGULATION FD DISCLOSURE
On July 22, 2014, the Company issued a press release announcing the closing of
its offering of the Notes, as described above under Item 1.01 of this current
report. A copy of the press release is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
In connection with the offering, on July 8, 2014, the Company entered into an
underwriting agreement with Morgan Stanley & Co. LLC, as representative of the
several underwriters named therein (the "Underwriting Agreement"). The
Underwriting Agreement includes the terms and conditions of the offer and sale
of the Notes, indemnification and contribution obligations and other terms and
conditions customary in agreements of this type. A copy of the Underwriting
Agreement is attached hereto as Exhibit 1.1, and incorporated herein by
reference.
Also in connection with the offering, the Company is filing a legal opinion
regarding the validity of the Notes as Exhibit 5.1 to this Form 8-K with
reference to, and incorporated by reference into, the Registration Statement.
Concurrently with the closing of the offering of the Notes, the Company
repurchased all of its outstanding 2019 Notes at a price of 110% of the
aggregate principal amount thereof, plus accrued and unpaid interest to, but not
including, July 22, 2014.  As of March 31, 2014, there was $320 million in
aggregate principal amount of 2019 Notes outstanding.
On July 22, 2014, the Company announced the consent date results of the tender
offers and consent solicitations described in Item 1.01 of this Current Report
on Form 8-K. A copy of the press release is furnished as Exhibit 99.2 herewith.


ITEM 9.01 - FINANCIAL STATEMENTS AND EXHIBITS
(d)  Exhibits
Exhibit No.    Description
    1.1        Underwriting Agreement, dated July 8, 2014, among the Company and
               Morgan Stanley & Co. LLC, as representative of the several
               underwriters named therein.

    4.1        Fifth Supplemental Indenture, dated as of July 22, 2014, between
               the Company and Wilmington Trust Company, governing the 2020 Notes.

    4.2        Fifth Supplemental Indenture, dated as of July 22, 2014, between
               the Company and Wilmington Trust Company, governing the 2021 Notes.

    4.3        Indenture, dated July 8, 2014, between the Company and Wilmington
               Trust, National Association, as trustee (the "Trustee").
               (Incorporated by reference to Exhibit 4.1 to the Company's Form
               S-3ASR filed with the Securities and Exchange Commission on July 8,
               2014).

    4.4        First Supplemental Indenture, dated as of July 22, 2014, between
               the Company and the Trustee, governing the 2023 Notes.

    4.5        Second Supplemental Indenture, dated as of July 22, 2014, between
               the Company and the Trustee, governing the 2025 Notes.

    4.6        Form of 2023 Note (included in Exhibit 4.4).

    4.7        Form of 2025 Note (included in Exhibit 4.5).

    5.1        Opinion of White & Case LLP relating to the validity of the Notes.

    23.1       Consent of White & Case LLP (included in Exhibit 5.1).

    99.1       Calpine Corporation Press Release regarding 2023 Notes and 2025
               Notes, July 22, 2014.*

    99.2       Calpine Corporation Press Release regarding Tender Offers and
               Consent Solicitations, July 22, 2014.*


__________
* Furnished herewith.

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