Calpine completes $373MM financing for 120MW upgrade of gas-fired plant in California

Source: Calpine Corporation 

Calpine Corporation (NYSE:CPN) announced that it has obtained a $373 million credit facility to finance construction of a 120 megawatt (MW) upgrade of its Los Esteros Critical Energy Facility in San Jose, California. The Company also announced that its Board of Directors has authorized the Company to repurchase up to $300 million in shares of its common stock. 

"With the financing for our major construction projects now complete and our liquidity more than sufficient to support these and our other near-term growth alternatives, we have turned our focus to the next step in our ongoing capital allocation process," said Jack Fusco, Calpine's President and Chief Executive Officer. "Given the current stock market environment and its impact on our share price, coupled with our positive long-term outlook for the company, we believe share repurchases at appropriate price levels represent an attractive opportunity to increase returns to our shareholders over the long term." 

Upon completion of construction, which is expected in mid-2013, the Los Esteros Critical Energy Facility will be upgraded from simple-cycle to combined-cycle natural gas-fired technology, enhancing the plant's efficiency and environmental performance and increasing its overall generation capacity. 

The related project finance facility includes $68 million in letter of credit facilities and a $305 million construction loan that will convert to a 10-year term loan when commercial operations begin. The construction loan and term loan facility will initially be priced at LIBOR plus 2.25%. The loan facility - jointly arranged by Credit Agricole CIB, Banco Bilbao Vizcaya Argentaria S.A., Bayerische Landesbank and West LB AG - is non-recourse to Calpine.

The share repurchase program is effective immediately. Repurchases may be made from time to time through open market purchases or privately negotiated transactions, in accordance with applicable securities laws. These repurchases may be commenced or suspended from time to time without prior notice. 

As of August 22, Calpine had 489,999,535 shares of common stock outstanding.

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