The bank debt for Calpine Construction Finance Company II (CCFC II), now called Calpine Generating Company, traded around the 981/2 range in front of the company's announcement that a refinancing is in the works. The bank debt began ticking up from the 97-971/2 range two weeks ago on rumors of a pending refinancing (LMW 2/2).
CCFC II's existing $2.5 billion revolver is slated to be replaced with $1.3 billion of non-recourse first-lien term loan and $1 billion of non-recourse second-lien notes. While the former loan is priced at LIBOR plus 11/2%, financiers said the new loan will likely be priced in the 3-4% range and the new notes even higher.
Deutsche Bank is set to lead the new financing package and the Bank of Nova Scotia will lead a $200 million revolver. Scotia and Credit Suisse First Boston hold the lead spots on CCFC II's existing bank debt. There was $2.17 billion outstanding on the piece by the end of September. Calls to Rick Barraza, Calpine's senior v.p. of investor relations were not returned.