Last Wednesday, information regarding Calpine Corp.'s previously announced securitization deal sent the company's term loan "B" trading above 97, up from the 96 97 level. Traders said paper changed hands in the 975/8 981/4 range. The company intends to sell approximately $800 million of senior secured notes due 2010. The securitization of power sales agreements is set to provide the company with liquidity for capital expenditures.
Meanwhile, loan traders said Calpine was back on track to receive a two-year extension for $1 billion of revolving credit capacity. Earlier in the week, market players said the company would only be able to get the deal pushed back for one year. This move would place the maturity of the revolvers ahead of a potential December 2004 put on $1.2 billion in convertible notes rather than afterwards, resolving an issue that had become a major point of contention for lenders. As LMW went to press, the latest buzz suggested that the company would get a two-year extension but could only use stock to deal with the put. Market players still maintain that there are a few holdouts on approving the full extension and Calpine's temporary extension expires next Monday. Rick Barraza, senior v.p. of investor relations for Calpine, declined comment.