Net proceeds from the loans, after transaction costs and fees, will be used to pay final construction costs and refinance amounts outstanding under the $250 million non-recourse project financing for the Rocky Mountain facility, and the $230 million non-recourse project financing for the Riverside facility. The balance of approximately $160 million, will be returned to Calpine and will be used for general corporate purposes. In addition, approximately $40 million in cash and $55 million in letters of credit will be returned to Calpine as the result of the elimination of certain reserves and letters of credit associated with the original non-recourse project financings.
The institutional term loans are secured by the power plants, and the lenders' recourse is limited to such security. None of the indebtedness will be guaranteed by Calpine Corporation.
The secured institutional term loans will be placed in the institutional term loan market. The refinancing is subject to certain conditions, including the execution of definitive documentation.
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