Calpine Corp.'s second-lien notes traded up five points to 90 after the note holders won two partial interest payments on these securities, according to a trader. The first interest payment is due in March and the second in September, according to the trader. A Calpine spokeswoman confirmed the company is in discussions with its second-lien note holders, but would not comment on the interest payments.
The interest payments were granted at the same court hearing that confirmed Calpine's debtor-in-possession financing, said the trader. The U.S. Bankruptcy Court for the Southern District of New York granted final approval for a $2 billion DIP financing to fund operations during Calpine's Chapter 11 restructuring. The DIP facility is secured by liens on all of Calpine's unencumbered assets and junior liens on all of its encumbered assets, according to a company release.