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We may incur additional indebtedness that may share in the liens on the Collateral securing the Exchange Notes, which will dilute the value of the Collateral.

The Collateral also secures (i) the 3.250% Senior Notes and the Term Loan, which represent an aggregate of $465.0 million of indebtedness at December 31, 2016, and (2) our $100.0 million Revolving Credit Facility,

under which our outstanding borrowings at December 31, 2016 were zero. Under the terms of the indenture governing the Exchange Notes, we also will be permitted in the future to incur additional indebtedness and other obligations that may be secured by additional liens on the Collateral securing the Exchange Notes. Any additional obligations secured by a lien on the Collateral will dilute the value of the Collateral securing the Exchange Notes. See “Description of the Exchange Notes—Security.”

The proceeds from the sale of all such Collateral may not be sufficient to satisfy the amounts outstanding under the Exchange Notes and all other indebtedness and obligations secured by such liens. If such proceeds were not sufficient to repay amounts outstanding under the Exchange Notes, then holders (to the extent not repaid from the proceeds of the sale of the Collateral) would only have an unsecured claim against our remaining assets, if any.

To the extent a security interest in any of the Collateral is created or perfected following the date of the issuance of the Exchange Notes, the security interest would remain at risk of being voided as a preferential transfer by a collateral agent in bankruptcy or being subject to the liens of intervening creditors.

The Exchange Notes will be secured only to the extent of the value of the assets that have been granted as security for the Exchange Notes and, as a result, there may not be sufficient Collateral to pay all or any of the Exchange Notes.

The Collateral has not been appraised in connection with this offering. The value of the Collateral and the amount that may be received upon a sale of the Collateral will depend upon many factors including, among others, the condition of the Collateral and of the electric transmission, distribution and generation and natural gas distribution industries, the ability to sell the Collateral in an orderly sale, the condition of the international, national and local economies, the availability of buyers and similar factors. By its nature, the Collateral is illiquid and may have no readily ascertainable market value. Liquidation of the Collateral will be subject to regulatory approval, including federal approval under the Federal Power Act and the approval of the LPSC.

Additionally, applicable law requires that every aspect of any foreclosure or other disposition of Collateral be “commercially reasonable.” If a court were to determine that any aspect of the collateral agent’s exercise of remedies was not commercially reasonable, the ability of the Trustee and you to recover the difference between the amount realized through such exercise of remedies and the amount owed on the Exchange Notes may be adversely affected and, in the worst case, you could lose all claims for such deficiency amount.

The imposition of certain permitted liens could adversely affect the value of the Collateral.

The Collateral securing the Exchange Notes will be subject to liens permitted under the terms of the indenture governing the Exchange Notes, whether arising on or after the date the Exchange Notes are issued. The existence of any permitted liens could adversely affect the value of the Collateral securing the Exchange Notes, as well as the ability of the collateral agent to realize or foreclose on such Collateral. The Collateral that will secure the Exchange Notes also secures our obligations under our Senior Secured Credit Facilities, the 3.250% Senior Notes, and the Term Loan, and may also secure future indebtedness and other obligations of ours to the extent permitted by the indenture and the Security Documents (as defined herein under “Description of Exchange Notes”). Your rights to the Collateral would be diluted by any increase in the indebtedness secured by this Collateral. To the extent we incur any permitted liens, the liens of holders of the Exchange Notes may not be first priority.

You will have limited rights to enforce remedies under the Security Documents and the Intercreditor, and the Collateral may be released without your consent in certain circumstances.

A collateral agent has been appointed by the holders of the liens on the Collateral, and such collateral agent (directly or through co-agents or sub-agents) is authorized to enforce all liens on the Collateral on behalf of the authorized representatives for the holders of the obligations secured by liens on the Collateral, including holders

of Exchange Notes. Under the terms of the Security Documents, subject to certain exceptions, for so long as the Senior Secured Credit Facilities remains outstanding, the collateral agent will pursue remedies, pursuant to the direction of the Required Secured Creditors (as defined in the Intercreditor), which may or may not be controlled by holders of the Exchange Notes, and take other action related to the Collateral, including the release thereof. Accordingly, during such time, the Required Secured Creditors will have a right to control all remedies and the taking of other actions related to the Collateral, including the release thereof, without the consent of the other holders and the Trustee under the indenture governing the Exchange Notes.

There are certain circumstances other than repayment or discharge of the Exchange Notes under which certain Collateral securing the Exchange Notes can be released without consent of the Trustee or the holders.

Under certain circumstances, the Collateral securing the Exchange Notes can be released without consent of the Trustee or the holders, including:

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Any of these events will eliminate or reduce the aggregate value of the Collateral securing the Exchange Notes.

Your interest in the Collateral may be adversely affected by the failure to perfect security interests.

Your security interests will only be perfected with respect to the Collateral by the filing of financing statements. The limited liability company membership interests in Cleco Power are not certificated and will not be perfected through the possession of these security instruments. To the extent that the security interest in the Collateral is unperfected, the rights of holders with respect to the Collateral will be equal to the rights of our general unsecured creditors in the event of any bankruptcy filed by or against us under applicable U.S. federal bankruptcy laws.

Intervening creditors may have a perfected security interest in the Collateral.

The Collateral is subject to liens permitted under the terms of our credit agreement governing the Revolving Credit Facility and the indenture governing the Exchange Notes whether arising before, on or after the date the Exchange Notes are issued. There is a risk that there may be a creditor whose liens are permitted under our credit agreement governing the Revolving Credit Facility or the indenture governing the Exchange Notes, or an intervening creditor that has a perfected security interest in the Collateral securing the Exchange Notes. If there is such an intervening creditor, the lien of such creditor, whether or not permitted under our credit agreement governing the Revolving Credit Facility or the indenture governing the Exchange Notes, may be entitled to a higher priority than the liens securing the Exchange Notes. The existence of any liens securing obligations owed to intervening creditors, including liens permitted under our credit agreement governing the Revolving Credit Facility or the indenture governing the Exchange Notes and incurred or perfected prior to the liens securing the Exchange Notes, could adversely affect the value of the Collateral securing the Exchange Notes, as well as the ability of the collateral agent to realize or foreclose on such Collateral.

The Collateral will also be subject to any and all exceptions, defects, encumbrances, liens and other imperfections as may be permitted by the Revolving Credit Facility or the indenture governing the Exchange Notes. The existence of any such exceptions, defects, encumbrances, liens and other imperfections could adversely affect the value of the Collateral that will secure the Exchange Notes, as well as the ability of the collateral agent to realize or foreclose on the Collateral for the benefit of holders.

Rights of holders in the Collateral may be adversely affected by bankruptcy proceedings.

The right and ability of the collateral agent for the holders to repossess and dispose of the Collateral securing the Exchange Notes upon an event of default is likely to be significantly impaired by U.S. federal bankruptcy law if bankruptcy proceedings are commenced by or against us prior to, or possibly even after, the collateral agent has repossessed and disposed of the Collateral. Under the U.S. Bankruptcy Code, a secured creditor, such as the collateral agent for the holders, is prohibited from repossessing Collateral from a debtor in a bankruptcy case, or from disposing of Collateral repossessed from a debtor, without bankruptcy court approval. Moreover, bankruptcy law permits the debtor to continue to retain and to use Collateral, and the proceeds, products, rents or profits of the Collateral, even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given “adequate protection.” The meaning of the term “adequate protection” may vary according to circumstances, but it is intended in general to protect the value of the secured creditor’s interest in the Collateral and may include cash payments or the granting of additional security, if and at such time as the court in its discretion determines, for any diminution in the value of the Collateral as a result of the stay of repossession or disposition or any use of the Collateral by the debtor during the pendency of the bankruptcy case.

In view of the broad discretionary powers of a bankruptcy court, it is impossible to predict how long payments under the Exchange Notes could be delayed following commencement of a bankruptcy case, whether or when the collateral agent could repossess or dispose of the Collateral, or whether or to what extent holders would be compensated for any delay in payment of loss of value of the Collateral through the requirements of “adequate protection.”

Furthermore, in the event the bankruptcy court determines that the value of the Collateral is not sufficient to repay all amounts due on the Exchange Notes, holders would have “undersecured claims” as to the difference. U.S. federal bankruptcy laws do not permit the payment or accrual of interest, costs and attorneys’ fees for “undersecured claims” during the debtor’s bankruptcy case.

Any future pledge of Collateral might be voidable in bankruptcy.

Any future pledge of Collateral in favor of the collateral agent for the holders, including pursuant to Security Documents delivered after the date of the indenture governing the Exchange Notes, might be voidable by the pledgor (as debtor-in-possession) or by its trustee in bankruptcy if certain events or circumstances exist or occur, including, among others, if the pledgor is insolvent at the time of the pledge, the pledge permits holders to receive a greater recovery than if the pledge had not been given and a bankruptcy proceeding in respect of the pledgor is commenced within 90 days following the pledge, or one year before commencement of a bankruptcy proceeding if the creditor that benefited from the guarantee or lien is an “insider” under the U.S. Bankruptcy Code.

Federal and state fraudulent transfer laws may permit a court to void the Exchange Notes, subordinate claims in respect of the Exchange Notes and require holders to return payments received and, if that occurs, you may not receive any payments on the Exchange Notes.

Federal and state fraudulent transfer and conveyance statutes may apply to the issuance of the Exchange Notes. Under U.S. federal bankruptcy law and comparable provisions of state fraudulent transfer or conveyance laws, which may vary from state to state, the delivery of the Exchange Notes could be voided as a fraudulent

transfer or conveyance if (a) we issued the Exchange Notes or granted securing interests on assets with the intent of hindering, delaying or defrauding creditors or (b) we received less than reasonably equivalent value or fair consideration in return for either issuing the Exchange Notes or granting securing interests on assets and, in the case of (b) only, one of the following is also true at the time thereof:

A court would likely find that we did not receive reasonably equivalent value or fair consideration for the Exchange Notes or granted securing interests on assets if we did not substantially benefit directly or indirectly from the issuance of the Exchange Notes or the granting of security interests. As a general matter, value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or an antecedent debt is secured or satisfied. A debtor will generally not be considered to have received value in connection with a debt offering if the debtor uses the proceeds of that offering to make a dividend payment or otherwise to retire or redeem equity securities issued by the debtor.

We cannot be certain as to the standards a court would use to determine whether or not we were solvent at the relevant time or, regardless of the standard that a court uses, that the granting of security interests would not be further subordinated to our other debt. Generally, however, an entity would be considered insolvent if, at the time it incurred indebtedness:

If a court were to find that the issuance of the Exchange Notes or granting of securing interests was a fraudulent transfer or conveyance, the court could void the payment obligation under the Exchange Notes or such securing interests, or further subordinate the Exchange Notes or such security interests to presently existing and future indebtedness of ours, or require holders to repay any amounts received with respect to such security interests. In the event of a finding that a fraudulent conveyance occurred, you may not receive any repayment on the Exchange Notes. Further, the voidance of the Exchange Notes could result in an event of default with respect to our and our subsidiaries’ other debt that could result in acceleration of such debt.

The value of the Collateral may not be sufficient to secure post-petition interest.

In the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding against us, holders will only be entitled to post-petition interest under the U.S. Bankruptcy Code to the extent that the value of their respective security interests in their Collateral is greater than their respective pre-bankruptcy claims. Holders may be deemed to have an unsecured claim to the extent that the fair market value of the Collateral securing the Exchange Notes, together with the other obligations secured by the same lien, is less than the face amount of all obligations secured by the same lien. In such case, holders will not be entitled to post-petition interest under the U.S. Bankruptcy Code. Upon a finding by a bankruptcy court that the Exchange Notes are

under-collateralized, the claims in the bankruptcy proceeding with respect to the Exchange Notes would be bifurcated between a secured claim and an unsecured claim, and the unsecured claim would not be entitled to the benefits of security in the Collateral. Other consequences of a finding of under-collateralization would be, among other things, a lack of entitlement on the part of the unsecured portion of the Exchange Notes to receive other “adequate protection” under the U.S. Bankruptcy Code. In addition, if any payments of post-petition interest had been made at the time of such a finding of under-collateralization, those payments could be recharacterized by the bankruptcy court as a reduction of the principal amount of the secured claim with respect to the Exchange Notes. No appraisal of the fair market value of the Collateral has been prepared in connection with the issuance of the Exchange Notes and, therefore, the value of the interests of holders in the Collateral may not equal or exceed the principal amount of the Exchange Notes and may not be sufficient to satisfy our obligations under all or any part of the Exchange Notes.

In addition, under most circumstances, while you share equally and ratably with the other secured parties in all proceeds from any realization on the Collateral, subject to certain exceptions, you will not control the rights and remedies with respect to the Collateral upon an event of default and the exercise of any such rights and remedies following such an event of default will be made by the collateral agent, acting at the direction of the administrative agent or the authorized representative of the largest outstanding debt secured by apari passulien on the Collateral.

We may not be able to repurchase the Exchange Notes upon a change in control or upon the exercise of the holders’ options to require repurchase of the Exchange Notes.

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