CALPINE CORPORATION (NYSE:CPN) Files An 8-K Entry into a Material Definitive Agreement

CALPINE CORPORATION (NYSE:CPN) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01—ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

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Item 1.01 — CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT

Item 1.01 — FINANCIAL STATEMENTS AND EXHIBITS

EXHIBIT INDEX

Item 1.01 — ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On April 5, 2019, Calpine Corporation (“Calpine” or the “Company”) amended its revolving credit facility (the “Amendment”), to increase the capacity by approximately $330 million from approximately $1.69 billion to approximately $2.02 billion. This description of the Amendment is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed herewith as Exhibit 10.1.

As further discussed under Item 1.01 below, on April 5, 2019, Calpine entered into a new seven-year $950 million first lien senior secured term loan facility (the “2026 First Lien Term Loan Facility”). Calpine used the proceeds received from the 2026 First Lien Term Loan Facility to repay in full the approximately $400 million first lien senior secured term loan facility dated February 3, 2017 and the approximately $550 million first lien senior secured term loan facility dated December 15, 2015.

The information included in Item 1.01 below is incorporated by reference into this Item 1.01.

Item 1.01 — CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT

As disclosed above, on April 5, 2019, Calpine entered into a new seven-year $950 million first lien senior secured term loan facility with Morgan Stanley Senior Funding, Inc., as administrative agent (the “Administrative Agent”), MUFG Union Bank, N.A., as collateral agent and the lenders party thereto from time to time. This summary of the material terms of the 2026 First Lien Term Loan Facility credit agreement (the “Credit Agreement”) does not purport to be complete and is qualified in its entirety by reference to the Credit Agreement, a copy of which is attached as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated by reference herein.

The Credit Agreement provides for a first lien senior secured term loan facility in an aggregate principal amount of $950 million, which bears interest, at Calpine’s option, at either (i) the Base Rate, equal to the highest of (a) the Federal Funds Effective Rate plus 0.5% per annum, (b) the Prime Rate or (c) the Eurodollar Rate for a one month interest period plus 1.0% (in each case, as such terms are defined in the Credit Agreement), plus an applicable margin of 1.75%, or (ii) LIBOR plus 2.75% per annum (with no LIBOR floor). Calpine will pay an upfront fee to the Lenders (as defined in the Credit Agreement) in an amount equal to 1.0% of the aggregate principal amount of the 2026 First Lien Term Loan Facility, which may be structured as original issue discount.

Calpine may reprice the 2026 First Lien Term Loan Facility, subject to receiving the required approval from the Lenders. If a Repricing Transaction (as defined in the Credit Agreement) occurs prior to the six-month anniversary of the closing date, Calpine will pay to the Administrative Agent for the account of the Lenders a prepayment premium equal to 1% of the principal amount that is being repriced. Calpine may elect to extend the maturity of term loans under the 2026 First Lien Term Loan Facility, in whole or in part, subject to approval from Lenders holding such term loans and willing to so extend.

Subject to certain qualifications and exceptions, the Credit Agreement will, among other things, limit Calpine’s ability and the ability of the guarantors to:

incur or guarantee additional first lien indebtedness;

enter into certain types of commodity hedge agreements that can be secured by first lien collateral;

enter into sale and leaseback transactions;

consolidate, merge or transfer all or substantially all of Calpine’s assets and the assets of Calpine’s restricted subsidiaries on a combined basis.

If a change of control triggering event occurs, Calpine shall notify the Administrative Agent in writing and shall make an offer to prepay the entire outstanding principal amount of the 2026 First Lien Term Loan Facility within thirty (30) days after the date of such change of control triggering event.

In connection with the 2026 First Lien Term Loan Facility, Calpine and its subsidiaries (subject to certain exceptions) have made certain representations and warranties and are required to comply with various affirmative and negative covenants. The 2026 First Lien Term Loan Facility is subject to customary events of default included in financing transactions, including, among others, failure to make payments when due, certain defaults under other material indebtedness, breach of certain covenants, breach of certain representations and warranties, involuntary or voluntary bankruptcy, and material judgments. If an event of default arises from certain events of bankruptcy or insolvency, all amounts outstanding under the 2026 First Lien Term Loan Facility will become due and payable immediately without further action or notice. If other Events of Default arise (as defined in the Credit Agreement) and are continuing,

the Lenders holding more than 50% of the outstanding 2026 First Lien Term Loan Facility amounts may declare all amounts outstanding to the 2026 First Lien Term Loan Facility to be due and payable immediately.

Item 1.01—FINANCIAL STATEMENTS AND EXHIBITS

ExhibitNo.

Description

Amendment No. 9 to the Credit Agreement, dated as of April 5, 2019, among Calpine Corporation, as borrower, the guarantors party thereto, MUFG Bank, Ltd, as administrative agent, MUFG Union Bank, N.A., as collateral agent, and the lenders party thereto.

Credit Agreement, dated April 5, 2019 among Calpine Corporation, as borrower, the lenders party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent, and MUFG Union Bank, N.A., as collateral agent.

CALPINE CORP Exhibit
EX-10.1 2 exhibit101-calpinerevolver.htm EXHIBIT 10.1 – AMENDMENT NO 9 TO REVOLVER Exhibit Exhibit 10.1Execution VersionAMENDMENT NO. 9TOCREDIT AGREEMENTThis AMENDMENT NO. 9 to the Credit Agreement,…
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About CALPINE CORPORATION (NYSE:CPN)

Calpine Corporation is a power generation company. The Company is engaged in the ownership and operation of primarily natural gas-fired and geothermal power plants in North America. The Company’s segments include West (including geothermal), Texas and East (including Canada). In the Northeast and Mid-Atlantic regions, the Company has generating units capable of burning either natural gas or fuel oil. The Company operates its business through various divisions and subsidiaries. The Company’s portfolio consists of various types of power generation technologies, including natural gas-fired combustion turbines, which include combined-cycle plants and renewable geothermal conventional steam turbines. Its Geysers Assets located in northern California represent the geothermal power generation portfolio in the United States, as well as the producing power generation asset of all renewable energy in the state of California.

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