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Banking industry

Deutsche Bank and Credit Suisse to Launch $2 Billion Financing Package for Calpine

Strategic Insights

— 2 min read

Deutsche Bank and Credit Suisse are poised to launch a $2 billion debtor-in-possession (DIP) financing package for energy company Calpine, pending a final decision from the bankruptcy judge. This massive financing package consists of a $1 billion term loan and a $1 billion first-lien revolver, with separate pricing for each component. The first-lien loan and revolver are expected to carry interest rates starting at LIBOR +225, while the second-lien term loan will begin at LIBOR +450. This move follows weeks of intense competition among banks to secure the right to prep the DIP financing, with Deutsche Bank and Credit Suisse ultimately emerging as the chosen lenders.

Key Takeaways:

  • The proposed DIP financing package totals $2 billion, comprising a $1 billion term loan and a $1 billion first-lien revolver.
  • The first-lien loan and revolver are expected to carry interest rates starting at LIBOR +225.
  • The second-lien term loan is expected to start at LIBOR +450.
  • The package consists of a two-year $350 million first-lien term loan, a two-year $650 million second-lien term loan, and a two-year $1 billion first-lien revolver.
  • Calpine has access to $500 million in funds currently, but the company is prohibited from commenting on the DIP financing ahead of Wednesday's court hearing.
  • Calpine's capital structure includes approximately $17 billion in debt set to mature at the holding company over the next few years.
  • This debt includes $5.6 billion of senior unsecured bonds, $642 million of first-lien notes, $3.7 billion of second-lien notes, and $12 billion of priority debt.

Statistics:

  • $2 billion: The total size of the proposed DIP financing package by Deutsche Bank and Credit Suisse for Calpine.
  • $1.7 billion: The combined total of the $1 billion term loan and $1 billion first-lien revolver.
  • LIBOR +225: The expected interest rate for the first-lien loan and revolver.
  • LIBOR +450: The expected interest rate for the second-lien term loan.
  • $350 million: The size of the two-year first-lien term loan.
  • $650 million: The size of the two-year second-lien term loan.
  • $1 billion: The size of the two-year first-lien revolver.
  • $500 million: The current amount of funds available to Calpine.
  • $17 billion: The total debt held by Calpine's holding company, set to mature over the next few years.
  • $5.6 billion: The amount of senior unsecured bonds held by Calpine.
  • $642 million: The amount of first-lien notes held by Calpine.
  • $3.7 billion: The amount of second-lien notes held by Calpine.
  • $12 billion: The amount of priority debt held by Calpine.

Sources:

  • PFR, 12/19

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