UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 26, 2004
CALPINE CORPORATION
(A Delaware Corporation)
Commission file number: 001-12079
I.R.S. Employer Identification No. 77-0212977
50 West San Fernando Street
San Jose, California 95113
Telephone: (408) 995-5115
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.03 -- CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
On October 26, 2004, Calpine (Jersey) Limited (the "Issuer"), an indirect
subsidiary of Calpine Corporation ("Calpine"), issued and sold $360 million of
its Redeemable Preferred Shares (the "Shares"). The Shares were sold in a
private placement to (i) accredited investors in reliance on Regulation D under
the Securities Act of 1933, as amended (the "Securities Act") and (ii) outside
the United States to persons who are not U.S. persons in reliance on Regulation
S under the Securities Act. All amounts in this report in $ or dollars are in
U.S. dollars.
The Shares will pay dividends quarterly in arrears on January 15, April 15,
July 15 and October 15 of each year, beginning January 15, 2005, at the rate of
three-month U.S. dollar LIBOR plus 700 basis points, resetting quarterly, and
will mature on October 15, 2006. The proceeds of the sale of the Shares were
loaned to Calpine Energy Finance Luxembourg S.ar.l. ("LuxCo"), an indirect
subsidiary of Calpine and an affiliate of the Issuer, pursuant to a senior
intercompany loan between Issuer, as lender, and LuxCo, as borrower. LuxCo then
loaned such proceeds to Saltend Cogeneration Company Limited ("SCCL") pursuant
to a senior intercompany loan between LuxCo, as lender, and SCCL, as borrower.
SCCL is a guarantor of the intercompany loan between the Issuer and LuxCo, and
both intercompany loans are guaranteed by certain other affiliates of LuxCo and
SCCL. Although the rights under the Shares are not secured, the intercompany
loan between the Issuer and LuxCo is secured by certain of the assets of LuxCo
and SCCL, and both intercompany loans are secured by certain of the assets of
each of the other guarantors of the loans. SCCL has further agreed that, upon
the occurrence of certain conditions (including obtaining additional third-party
consents), SCCL will provide certain additional assets as security for the
intercompany loans. In addition, Calpine has agreed that one of its Canadian
subsidiaries and one of its U.S. subsidiaries will, within 45 days of the
issuance of the Shares, collectively pledge as additional security for the
intercompany loans $270 million (based on their acquisition value) of senior
bonds of Calpine or its subsidiaries which are currently held by Calpine
subsidiaries.
The Issuer is required to redeem Shares (i) tendered to it by holders of
Shares following the occurrence of a change of control of the Issuer's direct
parent company, Calpine (Jersey) Holdings Limited and (ii) to the extent it
receives certain funds, including, subject to certain exceptions, payments of
principal under the intercompany loan between it and LuxCo and the proceeds of
certain debt issuances by the Issuer, and in certain circumstances by Calpine or
its other subsidiaries, in each case at the redemption prices specified in the
Articles of Association of the Issuer. The Shares may also be redeemed in whole
or in part at the Issuer's option at any time after April 26, 2005 at the
redemption prices specified in the Articles of Association of the Issuer. The
Issuer may also, at its option, redeem the Shares at 100% of the paid-up capital
of the Shares plus accrued and unpaid interest through the redemption date in
the event of certain changes in tax laws, tax treaties or published practice of
relevant tax authorities.
The Issuer is obligated under the terms of the Shares to comply with
certain covenants, including restrictions on the incurrence of liens; the
incurrence of debt; distributions on, and repurchase/redemptions of, certain
junior securities; mergers, consolidations and asset sales; certain affiliate
transactions; and amendments, waivers or transfers of the intercompany loan
between the Issuer and LuxCo or the related guaranties. In addition, the Issuer
must affirmatively enforce its rights under its intercompany loan to LuxCo and
the related guaranties, and provide certain financial information to holders of
Shares. The Issuer's Articles of Association further provide that upon the
occurrence of certain voting rights trigger events, the holders of the Shares
will have the right to elect the board of the Issuer. The voting rights trigger
events include the failure to declare and pay dividends when due; failure to
satisfy redemption provisions; cross defaults to the intercompany loans, loan
guaranties and other indebtedness in excess of $5 million; breach of the Share
covenants; continuing unenforceability or repudiation of the guaranties of the
intercompany loans or any security with respect to the intercompany loans or the
guaranties thereof; and certain insolvency events.
ITEM 8.01. OTHER EVENTS
NEWS RELEASE CONTACTS: 408-995-5115
Media Relations: Katherine Potter, Ext. 1168
Investor Relations: Rick Barraza, Ext. 1125
Calpine Closes $360 Million Preferred Equity Offering
Relating to its Saltend Project
SAN JOSE, Calif., Oct. 27 /PRNewswire-FirstCall/ -- Calpine Corporation's
(NYSE: CPN) indirect, wholly owned subsidiary Calpine (Jersey) Limited has
received funding on its $360 million offering of two-year, Redeemable Preferred
Shares at U.S. LIBOR plus 700 basis points.
The proceeds of the offering of the Redeemable Preferred Shares were loaned
to Calpine's 1,200-megawatt Saltend cogeneration power plant located in Hull,
Yorkshire, England, and the payments of principal and interest on such loan will
fund payments on the Redeemable Preferred Shares. The net proceeds of the
Redeemable Preferred Shares offering will be used as permitted by the company's
indentures.
The Redeemable Preferred Shares were not registered under the Securities
Act of 1933, and could not be offered in the United States absent registration
or an applicable exemption from registration requirements. The Redeemable
Preferred Shares were offered in a private placement in the United States under
Regulation D under the Securities Act of 1933 and outside of the United States
pursuant to Regulation S under the Securities Act of 1933. This press release
shall not constitute an offer to sell or the solicitation of an offer to buy.
Securities laws applicable to private placements limit the extent of information
that can be provided at this time.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: Statements in this press release regarding Calpine Corporation's
business which are not historical facts are "forward-looking statements" that
involve risks and uncertainties. For a discussion of such risks and
uncertainties, which could cause actual results to differ from those contained
in the forward-looking statements, see "Risk Factors" in the Company's Annual
Report or Form 10-K for the most recently ended fiscal year.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CALPINE CORPORATION
By: /s/ Charles B. Clark, Jr.
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Charles B. Clark, Jr.
Senior Vice President and Controller
Chief Accounting Officer
Date: November 5, 2004