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): February 1, 2005
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:
[ ] 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 January 31, 2005, Calpine European Funding (Jersey) Limited (the "Issuer"),
an indirect subsidiary of Calpine Corporation ("Calpine"), issued $260 million
of its Redeemable Preferred Shares (the "Shares"). The Shares were sold in a
private placement (i) to 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 a single dividend 180 days after issuance at the rate of
six-month U.S. dollar LIBOR plus 850 basis points and will mature 180 days after
issuance. The proceeds of the sale of the Shares were loaned to Calpine European
Funding (Jersey) Holdings Limited ("Parent"), an indirect subsidiary of Calpine
and an affiliate of the Issuer, pursuant to a senior intercompany loan between
Issuer, as lender, and Parent, as borrower. Such proceeds were then, through
loans on distributions, ultimately transferred to Calpine or certain of its
subsidiaries and applied in accordance with Calpine's outstanding indentures.
The Issuer/Parent intercompany loan is guaranteed by Calpine European Finance
LLC and, on a limited recourse basis, by certain other affiliates of Parent and
Issuer. Although the rights under the Shares are not secured, the intercompany
loan between the Issuer and Parent is secured by the assets of Calpine European
Finance LLC, including cash, intercompany loans and the share capital of Calpine
Finance (Jersey) Limited but excluding certain assets prohibited by pre-existing
intercompany loans and guarantees.
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 indirect parent
companies, Calpine European Finance LLC or Calpine (Jersey) 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 Parent and the
proceeds of certain debt issuances by the Issuer, and in certain circumstances
by Calpine or its other subsidiaries, as 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 at the prices specified in the Articles of
Association of the Issuer.
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 Parent or the related guaranties. In addition, the Issuer
must affirmatively enforce its rights under its intercompany loan to Parent 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 Subsidiary Closes $260 Million
Preferred Equity Offering Relating to its Saltend Energy Centre
(SAN JOSE, Calif.) /PR Newswire - First Call/ Feb. 1, 2005 - Calpine
Corporation's [NYSE:CPN] wholly owned subsidiary Calpine European Funding
(Jersey) Limited received funding on its $260 million offering of Redeemable
Preferred Shares, due on July 30, 2005. The Redeemable Preferred Shares were
priced at U.S. LIBOR plus 850 basis points, offered at 99% of par.
The proceeds from the offering of the Redeemable Preferred Shares will
initially be loaned to a holding company, which indirectly owns Calpine's
1,200-megawatt Saltend cogeneration power plant located in Hull, Yorkshire,
England. The net proceeds from this offering will ultimately be used as
permitted by Calpine's existing bond indentures.
The Redeemable Preferred Shares have not been registered under the
Securities Act of 1933, and may 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.
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: February 3, 2005