Calpine's "B" term loan is now in retail syndication with investors being offered a 1/4% upfront fee. Funds that committed before the retail round received a 11/ 2% discount, said a banker. The spread on the "B" is still LIBOR plus 33/ 4%, and even though the loan is now subscribed, the pricing is unlikely to be changed again, he added. The original terms were altered substantially after investors balked at the risk of lending to the embattled power generator, investors and bankers said. The originally floated LIBOR plus 23/ 4% spread was increased, some added collateral was thrown in and an equity offering has been announced that will provide some added liquidity, said a banker.
Bill Highlander, a Calpine spokesman, said the 69-70 million share offering totaling $920 million will be used to redeem $685 million in zero coupons. He declined to comment on the loan pricing. Credit Suisse First Boston, Citibank and Deutsche Bank lead the term loan "B," while Bank of Nova Scotia, Bayerische Landesbank, Bank of America, Toronto Dominion and CSFB lead the $1 billion revolver. Pricing on the revolver also increased to LIBOR plus 31/ 4%, with a 1/2% commitment fee.