Calpine Corporation, the parent company of Calpine Construction Finance Company, entered into a new credit agreement providing for a first lien senior secured term loan facility comprising (i) a $900 million 7-year term loan B tranche priced at LIBOR plus 225 basis points and (ii) a $300 million 8.5-year term loan B tranche priced at LIBOR plus 250 basis points, in each case with a LIBOR floor of 0.75%. The term loans were offered to investors at an issue price equal to 99.75%. Once drawn, CCFC intends to utilize the proceeds received from the new term loans to redeem the entire $1 billion in principal amount of CCFC’s outstanding 8% Senior Secured Notes due in 2016 at a redemption price equal to 104% (plus accrued and unpaid interest), to pay related transaction expenses and for other purposes. On May 3, 2013, a notice of redemption was sent to the holders of the 8% Senior Secured Notes due in 2016, and the redemption is expected to be consummated on June 3, 2013, at which time the new term loan facility is expected to be drawn.

“Calpine’s new term loans at CCFC accomplish three key objectives,” explained Stacey Peterson, Calpine’s Vice President of Finance and Treasurer. “First, this refinancing significantly reduces annual interest cost. Second, it extends our debt maturity profile, with the nearest maturity now in 2017. Third, the term loans provide for a more flexible capital structure while maintaining investment grade-like covenants. This transaction demonstrates Calpine’s continued focus on Adjusted Free Cash Flow Per Share growth through transactions accretive to our shareholders.”

Goldman Sachs, BofA Merrill Lynch, Credit Suisse, Deutsche Bank and Union Bank acted as joint lead arrangers for the new term loan facility.

Calpine Corporation generates more electricity than any other independent power producer in America, with a fleet of 93 power plants in operation or under construction, representing more than 27,000 megawatts of generation capacity.