Calpine Corp.'s term loan "B" moved higher last week as the company came out with its first quarter earnings report and revealed additional details of its announced plan to increase liquidity. The company's "B" piece traded in the 971/8 973/4 range, up from the 961/2 971/4 context, where the paper was quoted two weeks ago. The independent power producer's liquidity position looks better, said one trader. "A company like Calpine is going to be a little bit more sensitive to liquidity," he noted. Recently, the company received $105.5 million from a contract monetization and the restructuring of its interest in Acadia Power Partners.
Calpine is currently working to extend the maturity on its $1 billion corporate revolver for two years and toward a plan to deal with the November maturity on its CCFC1 facility. There had been some concern over the last three months that Calpine would ultimately end up filing for bankruptcy, but now that a deal is close to being completed, a lot of the uncertainty has been removed, said one buysider. The company also has a CCFC2 facility, which recently changed hands in the 86 range, according to a trader. San Jose, Calif.-based Calpine will tap the capital markets via Morgan Stanley for a $700-$800 million transaction to monetize its DWR-1 contract, a 1,000 megawatt contract with about an eight-year life, noted Rick Barraza, senior v.p. of investor relations for Calpine. He declined to comment on ongoing discussions with the company's banks.