Calpine Gets $5 Billion In DIP Financing

Power company Calpine, which is undergoing restructuring in bankruptcy proceedings, said on Thursday it had received funding for its new $5 billion debtor-in-possession credit facility.

The new financing will be used to refinance its existing $2 billion DIP facility and repay $2.5 billion of secured debt at its Calpine Generating Co. unit.

The new facility will lower Calpine's annual interest costs by $100 million.

The DIP financing includes a rollover option that allows Calpine to put in place exit financing to help the company emerge from its Chapter 11 bankruptcy proceedings.

Credit Suisse Securities, Goldman Sachs Credit Partners, JP Morgan Securities and Deutsche Bank Securities were collectively the lead arrangers for the DIP facility.

The facility consists of a $4 billion senior secured term loan priced at LIBOR plus 225 basis points and a $1 billion senior secured revolving credit facility at the same price.

The DIP facility will be secured by nearly all of Calpine's unencumbered assets and junior liens on all encumbered assets of Calpine and its debtor units.