================================================================= CALPINE BANKRUPTCY NEWS Issue Number 1* ----------------------------------------------------------------- Copyright 2005 (ISSN XXXX-XXXX) December 22, 2005 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 215-945-7000 FAX 215-945-7001 ----------------------------------------------------------------- CALPINE BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 572 Fernwood Lane, Fairless Hills, Pennsylvania 19030, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtors' cases. New issues are prepared by Karen F. Garcia, Christopher G. Patalinghug, Frauline S. Abangan and Peter A. Chapman, Editors. Subscription rate is US$45 per issue. Any re-mailing of CALPINE BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO CALPINE BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF CALPINE CORPORATION [00002] CALPINE CORPORATION'S BALANCE SHEET AS OF SEPT. 30, 2005 [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING [00004] CALPINE CORPORATION'S CHAPTER 11 DATABASE [00005] LIST OF CALPINE'S 80 LARGEST UNSECURED CREDITORS [00006] LIST OF CALPINE'S FIVE LARGEST SECURED CREDITORS [00007] SUMMARY OF CALPINE'S PUBLIC DEBT SECURITIES [00008] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF CASES [00009] S&P ASSIGNS "D" RATINGS AFTER CALPINE'S CHAPTER 11 FILING [00010] FITCH CUTS CALPINE RATINGS TO "D" ON BANKRUPTCY FILING [00011] CALPINE RESTRUCTURING GOOD NEWS FOR N. AMERICAN MARKET [00012] CLECO READY TO PROTECT INTERESTS IN CALPINE BANKRUPTCY [00013] CALPINE POWER RESPONDS TO CALPINE CH. 11 & CCAA FILINGS [00014] NORTHLAND POWER EVALUATES IMPACT OF CALPINE BANKRUPTCY KEY DATE CALENDAR ----------------- 12/20/05 Voluntary Petition Date 01/04/06 Deadline to File Schedules of Assets & Liabilities 01/04/06 Deadline to File Statements of Financial Affairs 01/04/06 Deadline to File Lists of Leases and Contracts 01/09/06 Deadline to Provide Utilities With Adequate Assurance 03/20/06 Deadline to remove actions under FRBP 9027 04/19/06 Deadline to make decisions about lease depositions 04/19/06 Expiration of Exclusive Plan Proposal Period 06/18/06 Expiration of Exclusive Solicitation Period 12/20/07 Deadline to Commence Avoidance Actions Organizational Meeting to Form Creditors' Committees First Meeting of Creditors under 11 USC Sec. 341 Bar Date for filing Proofs of Claim ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO CALPINE BANKRUPTCY NEWS ----------------------------------------------------------------- CALPINE BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtors' chapter 11 proceedings. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of CALPINE BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. 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Please enter my personal subscription to CALPINE BANKRUPTCY NEWS at US$45 per issue until I tell you to cancel my subscription. Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- (Distribution to multiple professionals at the same firm is provided at no additional cost.) CALPINE BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtors' chapter 11 proceedings. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of CALPINE BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF CALPINE CORPORATION ----------------------------------------------------------------- Calpine Corporation 50 West San Fernando Street San Jose, California 95113 Telephone: (408) 995-5115 Calpine Corporation, together with its direct and indirect subsidiaries, develops, builds, owns and operates power generation facilities and sells electricity (and its by-product, thermal energy, primarily in the form of steam), predominantly in North America. Calpine operates the largest fleet of natural gas-fired power plants in North America, and supplies approximately 3.5% of the electricity consumed in the United States, where the Company has ownership interests in, and operates, gas-fired power generation and cogeneration facilities, pipelines, geothermal steam fields and geothermal power generation facilities. The Company owns, leases and operates 92 power plants in 21 states in the United States and three Canadian provinces. The Company also has interests in an additional five plants under active construction, including an interest in a natural gas-fired facility in Mexico. The Company markets electricity produced by its generating facilities to utilities and other third party purchasers while thermal energy produced by the gas-fired power cogeneration facilities is primarily sold to industrial users. The Company offers to third parties energy procurement, engineering, liquidation and risk management services, combustion turbine component parts and repair and maintenance services. The Company is headquartered in San Jose, California, and employs approximately 3,302 people, of whom approximately 65 are represented by collective bargaining agreements. The Company was founded in 1984 to manage energy projects and provide consulting services to power generators. The Company acquired its first megawatt in 1989 and completed its initial public offering in 1996. Since that time, the Company has ambitiously pursued its goal of acquiring and developing the energy industry's leading fleet of efficient, clean and reliable power generation facilities. To that end, between 2001 and 2004, the Company more than doubled the number of its power plants and can presently deliver more than 26,000 megawatts of electricity, with approximately 2,000 megawatts under active construction, or enough power altogether for approximately 28 million households. The advanced technologies and cleaner fuel sources employed by the Company operate at significantly lower heat rates (a measure of efficiency), allowing for reduced fuel costs and strong competitive advantages, assuming free market-based competition. Within its major markets, the Company also seeks to locate its natural gas-fired plants in clusters, or "systems" to gain operational and supply-chain efficiencies. "One of the hallmarks of the Company's business model is its commitment to environmental responsibility," Eric N. Pryor, Calpine's executive vice president, interim and deputy chief financial officer and corporate risk officer, says. By focusing on the construction of modern, natural gas-fired and geothermal power plants -- which emit significantly less carbon monoxide and other toxic substances than coal-fired facilities -- the Company believes it currently has the largest, cleanest and most fuel- efficient fleet of power plants in the industry. The majority of the Company's plants use "combined cycle" generation; i.e., natural gas-fired combustion turbines and steam turbines that operate in tandem to generate power. "This process requires up to 40% less fuel than older technologies and has a much lower environmental impact. The Company is also one of the world's largest (if not the largest) producers of renewable and clean geothermal power, a natural energy source that burns no fossil fuels and thus has only negligible air emissions," Mr. Pryor says. Located in northern California at The Geysers, the Company has more than 350 active production wells providing steam that is piped into turbines to generate electricity. Among the Company's principal subsidiaries and affiliates are: (a) Calpine Energy Services, L.P., which offers to third parties energy procurement, liquidation and risk management services; (b) Calpine Turbine Services, which sells combustion turbine component parts and repair and maintenance services. Calpine Turbine Services in turn includes Power Systems Mfg., LLC, in Jupiter, Florida, Thomassen Turbine Systems America, Inc., and Thomassen Turbine Systems B.V., in the Netherlands; (c) Calpine Power Services, Inc., which provides engineering, procurement, construction management, commissioning and operations and management services; and (d) Calpine Construct, which develops and builds new power facilities. U.S. Electricity Market Mr. Pryor notes that the energy generation industry is one of the largest segments of the United States economy. "Until recently, electricity providers consisted of relatively few utility monopolies operating aged, inefficient, expensive and high- pollution facilities. But various industry trends, including deregulation, have introduced greater competition into energy markets. Most significantly, for the past decade, at the deregulated wholesale level, electric power generators have been able to sell directly to public utilities, municipalities and electric cooperatives." The majority of United States power plants are coal-fired or nuclear, Mr. Pryor relates, although most new power plants are fueled by natural gas. Future environmental protection initiatives could force many of the oldest and dirtiest coal plants to install costly emission control devices or close. Accordingly, the industry trend is likely to continue to be construction of cleaner and more efficient natural gas-fired facilities. According to Mr. Pryor, the Company's business model seeks to capitalize on these industry movements towards greater competition and cleaner fuel sources. "But although the overall consumption rate of electricity continues to grow, the recent completion of many natural gas-fired combustion turbine projects has led to a sharp increase in power supplies and excess capacity in many of the Company's markets. During 2005, the Company operated at an average baseload capacity factor of approximately 45% through November. At the same time, the presently high cost of natural gas has made the operation of natural gas-fired plants more expensive. The combination of these two factors -- an oversupply of electricity and the expensive price of natural gas fuel -- has caused severe liquidity challenges for many of the power providers in the United States electricity markets, including the Company." Prepetition Debts As of December 31, 2004, the Company's total consolidated funded debt was approximately $18,000,000,000, consisting of secured construction and project financing, capital lease obligations, senior notes and institutional term loans, convertible senior notes, preferred interests, trust preferred securities, secured and unsecured notes payable and borrowings under lines of credit. Moreover, as of the Petition Date, the Company had accumulated approximately $3,900,000,000 of net operating loss carryforwards and other tax credits. Calpine's primary secured obligations arise under a series of first and second lien financings totaling approximately $4,320,000,000 in aggregate outstanding principal amount. Calpine's unsecured obligations total approximately $5,330,000,000. The Company also borrowed money in relation to 16 projects: a. The CalGen Projects b. The KIAC Project c. The Nissequogue Cogen Project d. The Bethpage Project e. The Watsonville Project f. The Greenleaf Project g. The Gilroy Cogen Project h. The Geysers Projects i. The Agnews Project j. The Rumford-Tiverton Projects k. The Aries Project l. The South Point Project m. The Broad River Project n. The RockGen Project o. The Acadia Project p. The Auburndale Project As of the Petition Date: -- Calpine Generating Company, LLC's secured debt reached $2,405,000,000; -- approximately $204,200,000 of special project bonds guaranteed by KIAC Partners were outstanding; -- approximately $71,700,000 of Industrial Revenue Bonds guaranteed by Nissequogue Cogen Partners were outstanding; and -- Bethpage Energy Center 3, LLC, owed $121,440,000 pursuant a number of credit agreements. Among other things, Mr. Pryor relates: -- On December 28, 2005, the stipulated loss value under the Watsonville Facility Lease will be $17,404,841; -- As of November 30, 2005, the stipulated loss value under the Greenleaf Facility Lease is $50,048,423; -- On January 1, 2005, each of the stipulated loss value and the termination value under the Agnews Facility Lease will be $25,972,277; -- As of December 15, 2005, the termination value under the Tiverton Lease is $279,034,797 and the termination value under the Rumford Lease is $258,474,338; and -- As of November 30, 2005, the total outstanding principal balance under the Aries term Loans is approximately $169,500,000. Road to Bankruptcy Mr. Pryor says five things led to the Company's decision to seek bankruptcy protection: (i) Pressure from Competition The cost of natural gas -- needed to fuel the Company's fleet of mostly natural gas-fired combustion plants -- has risen to a historically high level while the cost of coal is relatively much lower. This persisting imbalance places the Company at a severe disadvantage as compared to its competitors that operate coal-fired facilities. The effect was exacerbated when the Company sold substantially all of its remaining oil and natural gas reserves in July 2005. Prior to the sale, the Company's cost to produce natural gas was significantly lower than natural gas prices in recent years and the sale left the Company in an unhedged, short fixed-price gas position. In addition, excess capacity in the energy market resulted in the Company running at an average baseload capacity factor during the past year of approximately 45%. This has resulted in lower revenues than the Company is capable of generating were it to run at optimal capacity levels. Excess capacity in the energy market over the past several years has also resulted in a sustained period of low spark spreads -- the difference between the cost of fuel and electricity revenues -- particularly in the Southeast, as well as in certain other markets in which the Company operates. Furthermore, certain contract constraints and other obligations prevent the Company from shutting down facilities that are not generating sufficient power to cover costs. (ii) Pressure from Suppliers One reason for the presently high cost of natural gas is constrained supplies from traditional drilling programs relative to demand. Although the high prices have led to initiatives to develop alternative supply options including liquid natural gas or coal gasification, these alternative sources of fuel are not currently available to the Company. So long as the price of natural gas remains high (or increases further), and the Company does not have access to significant sources of alternative fuel supplies, the Company will be adversely affected. (iii) Pressure from Inconsistent Deregulation The inconsistent transition to deregulated energy markets in North America exposes the Company to varying competitive pressures. In deregulated, highly competitive markets, the Company's natural gas-fired or geothermal merchant capacity competes directly with all other sources of electricity, including nuclear, coal, oil or gas-fired. In highly regulated, uncompetitive markets, however, a local utility relies largely on its own supply to satisfy its own demand before buying competitively provided power. It is a sizable challenge for the Company to operate within and among these varying environments. (iv) The Company's Highly Leveraged Structure is Restrictive The Company relied heavily on debt financing to fund its rapid growth. Satisfying its obligations under its indebtedness, while funding anticipated capital expenditures and working capital requirements during what has been a period of low average baseload capacity factors and depressed spark spreads has left the Company with liquidity shortfalls. Accordingly, the Company launched a strategic initiative to reduce debt in May 2005 that included the possible sale or monetization of certain of the Company's assets. But covenant restrictions in the Company's debt (and certain equity) instruments preclude the Company from undertaking certain of these transactions or restrict the use of proceeds therefrom. Thus, the Company has been prevented from raising the necessary money to fund its debt service and operational needs, and even if those transactions could be completed, using the proceeds to reduce its debt. (v) Recent Liquidity Events with Serious Implications A number of recent setbacks to the Company's liquidity position culminated in the filing of the Chapter 11 Cases. Most significantly, the Company's use of certain asset sale proceeds to purchase fuel for its power plants resulted in litigation with the trustees representing the holders of the Company's First- and Second-Lien Notes, who alleged that the use of the asset sale proceeds violated the terms of the indentures governing those Notes. Within the last month, the Delaware Chancery Court ruled that the Company's fuel purchases violated those indentures and ordered the Company to repay into a collateral account $313,000,000 plus interest by January 22, 2006. The Company appealed this decision but, on December 16, 2005, the Delaware Supreme Court affirmed the decision of the Chancery Court requiring that those funds be repaid. Transactions Within the Next Month For the 30-day period following the Petition Date, Calpine expects: Estimate Cash Receipts $200M - $250M Estimate Cash Disbursements $190M - $240M Net Cash Gain or Loss $10M - ($10M) Obligations expected to remain unpaid $190M - $240M Receivables expected to remain unpaid $200M - $250M Prior to the Petition Date, Calpine retained AlixPartners, a leading corporate advisory and restructuring firm, to assist in its restructuring efforts. Following the Petition Date, Calpine will retain AP Services LLC, subject to Bankruptcy Court approval, to provide financial consulting services. The estimated fees for AlixPartners for the 30 days following the Petition Date is $1,750,000. Calpine estimates that the amounts paid and proposed to be paid for services to be provided by their directors and officers for the next 30 days is approximately $683,735. The estimated consolidated amount of weekly payroll to all employees of Calpine and its debtor and non-debtor domestic affiliates -- exclusive of directors, officers, stockholders and partners -- is approximately $21,010,220. The Company will not make any payroll-related payments to their stockholders during this time. The Debtors, however, may provide goods and services to one another in the ordinary course of business. ----------------------------------------------------------------- [00002] CALPINE CORPORATION'S BALANCE SHEET AS OF SEPT. 30, 2005 ----------------------------------------------------------------- Calpine Corporation and Subsidiaries Consolidated Condensed Balance Sheet As of September 30, 2005 ASSETS Current assets: Cash and cash equivalents $843,136,000 Accounts receivable, net 1,537,620,000 Margin deposits and other prepaid expense 415,331,000 Inventories 151,672,000 Restricted cash 1,106,685,000 Current derivative assets 703,665,000 Current assets held for sale 47,152,000 Other current assets 232,741,000 --------------- Total current assets $5,038,002,000 --------------- Restricted cash, net of current portion $204,433,000 Notes receivable, net of current portion 194,076,000 Project development costs 135,291,000 Unconsolidated investments 348,058,000 Deferred financing costs 363,513,000 Prepaid lease, net of current portion 467,658,000 Property, plant and equipment, net 18,542,923,000 Goodwill 45,160,000 Other intangible assets, net 66,410,000 Long-term derivative assets 925,251,000 Long-term assets held for sale 210,213,000 Other assets 547,249,000 --------------- Total assets $27,088,237,000 =============== LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $1,192,408,000 Accrued payroll and related expense 85,205,000 Accrued interest payable 406,752,000 Income taxes payable 64,562,000 Notes payable & borrowings under lines of credit 208,145,000 Preferred interests 159,453,000 Capital lease obligation 7,143,000 CCFC I financing 3,208,000 Construction/project financing 85,891,000 Senior notes and term loans 967,892,000 Current derivative liabilities 974,097,000 Current liabilities held for sale 6,623,000 Other current liabilities 355,790,000 --------------- Total current liabilities $4,517,169,000 --------------- Notes payable & borrowings under lines of credit, net $586,770,000 Convertible debentures payable to Calpine Capital Trust III 0 Preferred interests, net 283,615,000 Capital lease obligation, net 281,045,000 CCFC I financing, net 780,901,000 CalGen/CCFC II financing 2,396,720,000 Construction/project financing, net 2,361,716,000 Convertible Notes 1,833,790,000 Senior notes and term loans, net 7,231,719,000 Deferred income taxes, net 1,109,073,000 Deferred revenue 139,834,000 Long-term derivative liabilities 1,215,463,000 Long-term liabilities held for sale - Other liabilities 217,257,000 --------------- Total liabilities $22,955,072,000 --------------- Minority interests $403,197,000 --------------- Stockholders' equity: Preferred stock $0 Common stock 569,000 Add'l. paid-in capital 3,262,604,000 Add'l. paid-in capital, loaned shares 258,100,000 Add'l. paid-in capital, returnable shares (258,100,000) Retained earnings 642,169,000 Accum. other comprehensive income (loss) (175,374,000) --------------- Total stockholders' equity $3,729,968,000 --------------- Total liabilities & stockholders' equity $27,088,237,000 =============== ----------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING ----------------------------------------------------------------- Calpine Corporation Files Chapter 11 Petitions to Facilitate Debt Restructuring Receives Commitments for $2 Billion of Debtor-in-Possession Financing; Expects Normal Operations to Continue SAN JOSE, California -- December 20, 2005 -- Calpine Corporation (OTC Pink Sheets: CPNL) announced today that, in order to allow continued operations at its power plants and facilities in the U.S., Canada, and Mexico, strengthen its balance sheet, protect its assets, and enhance the value of its business, the company and many of its subsidiaries, including Calpine Generating Company, LLC, filed voluntary petitions to restructure under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York in Manhattan. The Company also announced today that certain of its direct and indirect subsidiaries and affiliates in Canada intend to file for creditor protection under the Companies' Creditors Arrangement Act ("CCAA"). In conjunction with the filing, Calpine has received commitments for up to $2 billion of secured debtor-in-possession (DIP) financing from Deutsche Bank and Credit Suisse First Boston, joint lead arrangers and joint bookrunners. The financing includes a $1 billion revolving credit facility and a $1 billion term loan. Upon Court approval, the financing, combined with cash from operations, will be used to fund post-petition operating expenses, including employee and supplier obligations. Calpine emphasized that normal operations will continue during the restructuring process. "Our plan calls for power plants to remain available for operation to provide reliable supplies of electricity," said Robert P. May, Calpine's Chief Executive Officer. "We intend to move through this restructuring process as quickly as possible to regain our financial health and to take the necessary steps to become a stronger and more competitive energy provider. With our new financing we will have additional financial flexibility and sufficient liquidity to meet our obligations going forward." "We believe that Calpine needs to change its business model in light of the ongoing evolution of competitive power markets and our current financial condition," May said. "Although the company has taken numerous steps to reduce its debt and strengthen its balance sheet through asset sales and other means, these actions were not sufficient to offset the cost of Calpine's substantial debt obligations. "After careful consideration of all available alternatives, Calpine's Board of Directors determined that a Chapter 11 filing was a necessary and prudent step and the best way to obtain the financing necessary to maintain regular operations, and allow for a successful restructuring," said May. "Calpine has a strong foundation in place, with high quality assets and a professional and experienced workforce. Chapter 11 protection will provide us with the ability to address our financial challenges without disrupting our ability to continue to provide reliable power supplies to the markets in which we operate." As a routine matter, Calpine has asked the Court for authorization to continue paying employee wages and salaries, providing benefits without interruption, and expects the Court to grant that request. During the restructuring process, Calpine will continue to evaluate all opportunities to strengthen its balance sheet and enhance operating cash flow, including asset sales and reductions in operating and overhead costs. In addition, Calpine has petitioned the court to reject certain of its contracts, including power sales agreements in which the price paid to Calpine for electricity is significantly below its cost or market prices. The company expects its power plants will continue to be available to meet the needs of electricity consumers in all of its service areas. The Chapter 11 filing does not affect the tender offer to purchase up to $400 million of the outstanding 9-5/8% First Priority Senior Secured Notes due in 2014 (the "Offer") that commenced on December 1, 2005. As previously announced, the Offer will remain open until 12:00 midnight, New York City Time, on December 29, 2005, unless extended or earlier terminated. The company has established a toll-free restructuring information line for employees, suppliers, customers, investors and other interested parties, 1-866-504-6370. More information on Calpine's restructuring is also available on the company's web site, http://www.calpine.com. For access to Court documents and other general information about the Chapter 11 cases, please visit http://www.kccllc.net/calpine. A major power company, Calpine Corporation supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. Calpine was founded in 1984. ----------------------------------------------------------------- [00004] CALPINE CORPORATION'S CHAPTER 11 DATABASE ----------------------------------------------------------------- Lead Debtor: Calpine Corporation 50 West San Fernando Street San Jose, California 95113 Bankruptcy Case No.: 05-60200 Debtor affiliates filing separate chapter 11 petitions: Case No. Debtor Entity -------- ------------- 05-60199 Calpine Kennedy Operators, Inc. 05-60201 Calpine Administrative Services Company, Inc. 05-60202 Calpine Power Company 05-60203 Calpine Fuels Corporation 05-60204 Calpine Finance Company 05-60205 Calpine International Holdings, Inc. 05-60206 Calpine Operations Management Company, Inc. 05-60207 Calpine Energy Holdings, Inc. 05-60208 Calpine Energy Services Holdings, Inc. 05-60209 CPN Energy Services GP, Inc. 05-60210 CPN Energy Services LP, Inc. 05-60211 Calpine PowerAmerica, Inc. 05-60212 Calpine PowerAmerica, LP 05-60213 Calpine PowerAmerica - CA, LLC 05-60214 Calpine PowerAmerica - CT, LLC 05-60215 Calpine PowerAmerica - MA, LLC 05-60216 Calpine PowerAmerica - ME, LLC 05-60217 Calpine Producer Services, LP 05-60218 CES GP, LLP 05-60221 Calpine Capital Trust V 05-60222 Calpine Energy Services 05-60223 Amelia Energy Center, LP 05-60224 Bellingham Cogen Inc. 05-60225 Bethpage Energy Center 3, LLC 05-60226 Anacapa Land Company, LLC 05-60227 Calpine Freestone Energy GP, LLC 05-60228 Bethpage Fuel Management Inc. 05-60229 CalGren Finance Corp. 05-60230 Calpine Freestone Energy, LP 05-60231 Calpine Freestone, LLC 05-60232 Anderson Springs Energy Company 05-60233 Calpine Cogeneration Corporation 05-60234 Calpine Gas Holdings 05-60235 Blue Heron Energy Center LLC 05-60236 CalGren Project Equipment Finance Company One, LLC 05-60237 Calpine Generating Company, LLC 05-60238 Blue Spruce Holdings, LLC 05-60239 Androscoggin Energy, Inc. 05-60240 Calpine Gilroy 1, Inc. 05-60241 Calpine Gilroy 2, Inc. 05-60242 Broad River Energy LLC 05-60243 Calpine Gilroy Cogen, LP 05-60244 Auburndale Peaker Energy Center, LLC 05-60245 Broad River Holding, LLC 05-60246 Calpine Global Services Company, Inc. 05-60247 Calpine Corpus Christi Energy GP, LLC 05-60248 Augusta Development Company, LLC 05-60249 CalGen Equipment Finance Company, LLC 05-60250 Calpine c* Power, Inc. 05-60251 CalGen Equipment Finance Holdings, LLC 05-60252 Aviation Funding Corp. 05-60253 CalGen Expansion Company, LLC 05-60254 Calpine Decatur Pipeline, L.P. 05-60255 Baytown Energy Center, LP 05-60256 Baytown Power GP, LLC 05-60257 Calpine East Fuels, Inc. 05-60258 Baytown Power, LP 05-60259 CalGren Project Equipment Finance Company Three, LLC 05-60260 Calpine Construction Management Company, Inc. 05-60261 Calpine Corpus Christi Energy LP 05-60262 CalGren Project Equipment Finance Company Two, LLC 05-60263 Calpine Decatur Pipeline Inc. 05-60264 Calpine Dighton, Inc. 05-60265 Calpine Acadia Holdings, LLC 05-60266 Calpine Eastern Corporation 05-60267 CCFC Development Company, LLC 05-60268 Calpine Agnews, Inc. 05-60269 CCFC Equipment Finance Company, LLC 05-60270 Calpine Amelia Energy Center GP, LLC 05-60271 CCFC Project Equipment Finance Company One, LLC 05-60272 Calpine Amelia Energy Center LP, LLC 05-60273 Celtic Power Corporation 05-60274 CGC Dighton, LLC 05-60275 Channel Energy Center, LP 05-60276 Channel Power GP, LLC 05-60277 Channel Power LP 05-60278 Clear Lake Cogeneration Limited Partnership Chapter 11 Petition Date: December 20 & 21, 2005 Court: United States Bankruptcy Court Southern District of New York Alexander Hamilton Custom House One Bowling Green New York, NY 10004-1408 Telephone (212) 510-0500 http://www.nysb.uscourts.gov Judge: The Honorable Burton R. Lifland Debtors' Counsel: Richard M. Cieri, Esq. Matthew A. Cantor, Esq. Edward Sassower, Esq. Robert G. Burns, Esq. KIRKLAND & ELLIS LLP Citigroup Center 153 East 53rd Street New York, NY 10022-4611 Telephone (212) 446-4800 Fax (212) 446-4900 http://www.kirkland.com Debtors' Crisis Managers: Lisa J. Donahue Managing Director AP SERVICES, LLC 2000 Town Center, Suite 2400 Southfield, MI 48075 Telephone (248) 358-4420 Fax (248) 358-1969 http://www.alixpartners.com/ Debtors' Financial Advisors and Investment Bankers: Kenneth A. Buckfire Managing Director MILLER BUCKFIRE & CO., LLC 250 Park Avenue New York, NY 10177 Telephone (212) 895-1800 Fax (212) 895-1850 http://www.millerbuckfire.com/ Debtors' Energy Industry Consultants: Todd Filsinger PA CONSULTING GROUP, INC. 1999 Broadway Street, Suite 1400 Denver, CO 80202 - and - PA CONSULTING GROUP, INC. 390 Interlocken Crescent, Suite 410 Broomfield, CO 80482 Telephone (720) 566-9920 Fax (720) 566-9680 http://www.paconsulting.com/ Debtors' Notice, Claims and Balloting Agent: Jonathan A. Carson President KURTZMAN CARSON CONSULTANTS LLC 12910 Culver Blvd., Suite I Los Angeles, California 90066 Telephone (310) 823-9000 Fax (310) 823-9133 http://www.kccllc.com/ Members of the Prepetition First-Lien Committee: Unknown Counsel to the Prepetition First-Lien Committee: Steven B. Levine, Esq. BROWN RUDNICK One Financial Center Boston, MA 02111 Members of the Prepetition Second-Lien Committee: AIG Global Investment Corp, 70 Pine Street New York, New York 10270 Angelo, Gordon & Co. L.P. 245 Park Avenue, 26th Floor New York, New York 10167 Avenue Capital Group 535 Madison Avenue, 14th Floor New York, New York 10022 Contrarian Capital Management LLC 411 West Putnam Avenue, Suite 225 Greenwich, Connecticut 06830 Franklin Advisers, Inc. One Franklin Parkway San Mateo, California 94403 Goldman Sachs Credit Partners L.P. One New York Plaza, 48th Floor New York, New York 10004 Lehman Brothers Inc. (Global Trading Strategies) 399 Park Avenue, 9th Floor New York, New York 10022 Mackay Shields LLC 9 West 57th Street New York, New York 10019 Oaktree Capital Management, LLC 333 S. Grand Avenue, 28th Floor Los Angeles, California 90071 Satellite Asset Management, L.P. 623 Fifth Avenue, 19th Floor New York, New York 10022 Wilmington Trust Company, as Indenture Trustee Rodney Square North 1100 North Market Street Wilmington, Delaware 19890-1615 (Ex Officio Member) The Second Lien Debt includes: (a) the Second Priority Senior Secured Floating Rate Notes due 2007 issued under that certain Indenture dated as of July 16, 2003, by and between Calpine Corporation, as issuer, and Wilmington Trust Company, as trustee; (b) the 8.5% Second Priority Senior Secured Notes due 2010 issued under that certain Indenture dated as of July 16, 2003, by and between the Company, as issuer, and Wilmington Trust, as trustee; (c) the 8.75% Second Priority Senior Secured Notes due 2013 issued under that certain Indenture dated as of July 16, 2003, by and between the Company, as issuer, and Wilmington Trust, as trustee; (d) the 9.875% Second Priority Senior Secured Notes due 2011 issued under that certain Indenture dated as of November 18,2003, by and between the Company, as issuer, and Wilmington Trust, as trustee; and (e) the Senior Secured Term Loans due 2007 made under that certain Term Loan Agreement dated as of July 16, 2003, by and between the Company, as borrower, and Goldman Sachs Credit Partners L.P., as administrative agent. Counsel to the Prepetition Second-Lien Committee: Alan W. Kornberg, Esq. Andrew N. Rosenberg, Esq. Elizabeth R. McColm, Esq. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, NY 10019-6064 Telephone (212) 373-3000 Fax (212) 757-3990 U.S. Trustee: Deirdre A. Martini United States Trustee for Region 2 U.S. Department of Justice Office of the United States Trustee 33 Whitehall Street, 21st Floor New York, NY 10004-2111 Telephone (212) 510-0500 Fax (212) 668-2255 http://www.usdoj.gov/ust/r02 Financial Condition at December 19, 2005: Total Assets: $26,628,755,663 Total Liabilities: $22,535,577,121 ----------------------------------------------------------------- [00005] LIST OF CALPINE'S 80 LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Contemporaneously with the filing of their petitions, Calpine Corporation and its debtor-affiliates delivered a list of their 80 largest unsecured creditors, on a consolidated basis, to the U.S. Bankruptcy Court in Manhattan. Calpine's Top 80 List is based on the Debtors' books and records as of approximately December 19, 2005. The Top 80 List was prepared in accordance with Rule 1007(d) of the Federal Rules of Bankruptcy Procedure. The Top 80 List does not include: (1) persons who come within the definition of "insider" set forth in 11 U.S.C. Sec. 101; or (2) secured creditors, unless the value of the collateral is such that the unsecured deficiency places the creditor among the holders of the 80 largest unsecured claims. Calpine makes it clear that the information presented in the Top 80 List does not constitute an admission by the Debtors nor is it binding on the Debtors. The Debtors reserve all rights to challenge the priority, nature, amount and status of any claim or debt. Nature of Creditor Claim Claim Amount -------- --------- ------------ Wilmington Trust Company 1100 North Market Street Mailcode 2301 Wilmington, DE 19890 8-1/2% Tel: (302) 636-6016 Sr. Notes Fax: (302) 636-4145 due 2008 $1,439,157,825 Wilmington Trust Company 8-1/2% Senior Notes Due 2011 $702,942,818 Wilmington Trust Company 7.75% Convertible Notes Due 2015 $652,658,681 Wilmington Trust Company 6.00% Convertible Senior Notes Due 2014 $650,133,853 Wilmington Trust Company 4.75% Convertible Notes Due 2023 $636,701,808 Wilmington Trust Company 8-5/8% Senior Notes Due 2010 $423,449,697 Deutsche Bank 60 Wall Street, 27th Floor New York, NY 10005 8-7/8% Tel: 44-207-5477392 Senior Notes Fax: 44-207-5476149 Due 2011 (6BP) $211,197,016 The Bank of New York 101 Barclay Street, 21W 21 W New York, NY 10286 8-3/4% Tel: (212) 815-5845 Senior Notes Fax: {212) 815-3272 Due 2007 $197,468,251 The Bank of New York 7-3/4% Senior Notes Due 2009 $183,129,174 The Bank of New York 7-7/8% Senior Notes Due 2008 $176,763,807 Wilmington Trust Company 8-3/4% Senior Notes Due 2007 $173,781,867 US Bank 633 West 5th Street, 24th Floor Los Angeles, CA 90071 10-1/2% Tel: (617) 603-6582 Senior Notes Fax: (617) 603-6669 Due 2006 $140,626,051 Deutsche Bank 8-3/8% Senior Notes Due 2008 $139,559,555 The Bank of New York 7-5/8% Senior Notes Due 2006 $103,600,942 Calpine Commercial Trust 111 - 5th Avenue SW, Suite 2800 Calgary, Alberta T2P 3Y6 Canada Bank Loan - Tel: (403) 750-3368 Calpine Canada Fax: (403) 264-4203 Power $30,384,425 Amerada Hess Corporation 1 Hess Plaza Woodbridge, NJ 07095-0961 Fax: 713/609-4251 Energy Trading $9,391,978 Dynegy Marketing and Trade P.O. BOX 730508 Dallas, TX 75373-0508 Tel: 713/507-6410 Energy Trading $7,557,989 Enbridge Pipelines (Bamagas Infrastate) Inc. 1100 Louisiana, Suite 3300 Houston, TX 77002 Tel: 713-821-2010 Fax: 713-821-2140 Trade Debt $6,184,852 Dominion Energy Marketing, Inc. Dominion Energy Clearinghouse 120 Tredegar Street Richmond, VA 23219 Tel: 804-787-5939 Fax: 866-339-6874 Trade Debt $5,641,916 Pacific Gas and Electric Company PO Box 997300 Sacramento, CA 95899-7300 Tel: 800.945.5251 Trade Debt $4,682,696 Elm Ridge Exploration Co., a Ltd. Partnership 12225 Greenville Avenue, Suite 950 Dallas, TX 75243 Trade Debt $4,108,800 General Electric Company PO Box 641469 Pittsburgh, PA 15264-1469 Trade Debt $4,083,131 Pogo Producing Company 5 Greenway Plaza, Suite 2700 Houston, TX 77046-0504 Trade Debt $4,068,498 Precicast S.A. [Address Unknown] Trade Debt $3,756,943 Lyondell-Citgo Refining LP 12000 Lawndale Houston, TX 77252-2451 Trade Debt $3,022,432 ABB Power T&D Co. Inc. PO Box 100264 Pasadena, CA 91189-0264 Trade Debt $2,948,669 South Carolina Pipeline Corporation PO Box 102407 Columbia, SC 29224-2407 Tel: 803-217-2134 Fax: 803-217-2104 Trade Debt $2,806,812 General Electric International, Inc. c/o Deutsche Bank And Trust ACCT # 502 721 19 New York, NY 10001 Attn: Billy H. Whitaker Fax: 262-786-5589 Trade Debt $2,715,755 Institution Of Propulsion Technology 1936 South Andrews Avenue Ft. Lauderdale, FL 33316 Tel: 954-763-3303 Fax: 954-522-6507 Trade Debt $2,455,000 Cross Timbers Energy Services, Inc. 810 Houston Street Fort Worth, TX 76102-6298 Tel: 817-885-2204 Fax: 817-882-7259 Trade Debt $2,229,000 Atlantic Oil Company 310 East Colorato Street, Suite 201 Glendale, CA 91205 Trade Debt $2,225,175 Contra Costa Water District 1331 Concord Avenue P.O. Box H2O Concord, CA 94524-2099 Tel: (925) 638-8300 Fax: (925) 688-8347 Payable $2,184,242 Coral Energy Holding, L.P. 909 Fannin, Suite 700 Houston, TX 77010 Tel: 713-230-3849 Fax: 713-767-5445 Trade Debt $2,094,400 Stream Energy, inc. 5001 California Avenue, Suite 110 Bakersfield, CA 93309 Trade Debt $2,039,977 Churbuck, Thomas 911 Tamarind Way Boca Raton, Florida 33486 Trade Debt $1,922,539 Tenaska Power Services Co. 1701 E. Lamar Blvd., Suite 100 Arlington, TX 76006 Tel: 817-462-1521 Fax: 817-462-1038 Trade Debt $1,771,170 The Dow Chemical Company PO Box 1398 Pittsburg, CA 94565 Trade Debt $1,663,863 Select Energy Inc. P.O. Box 270 Hartford, CT 06037 Tel: 860-665-6892 Fax: 860-665-6892 Trade Debt $1,612,663 Portland Natural Gas Transmission System One Harbour Place, Suite 375 Portsmouth, NH 03801 Tel: 603-559-5500 Fax: 603-427-2807 Trade Debt $1,480,823 Long Island Power Authority Attn: Cash Mgmt.-NPB, 22nd Floor 1 Metrotech Center Brooklyn, NY 11201 Tel: 800-490-0025 Trade Debt $1,347,808 NOVA Gas Transmission Ltd. 450 - 1st Street S.W., 10th Floor Calgary, Alberta T2P 1C9, Canada Tel: 403-920-2739 Fax: 403-920-2368 Trade Debt $1,341,379 Wilmington Trust Company 4% Convertible Senior Notes Due 2006 $1,336,346 Kraft, Robert 1470 S.W. Dyer Point Road Palm City, Florida 34990 Trade Debt $1,311,016 Bruce Agardy 15050 Golden Point Lane Wellington, Florida 33432 Trade Debt $1,311,016 Fresh Meadow Mechanical Corp. 65-01 Fresh Meadow Lane Fresh Meadows, NY 11365 Trade Debt $1,256,856 Hickham Industries, Inc. 11518 Old Laporte Rd La Porte, TX 77571 Tel: 713-567-2700 Trade Debt $1,245,491 Esco Turbine Technologies P.O. Box 92601 Cleveland, OH 44101-2601 Tel: 800 927 3555 Fax: 216 430 6915 Trade Debt $1,100,488 Nooter/Eriksen, Inc. PO Box 66888 St. Louis, MO 63166-6688 Trade Debt $1,185,810 Safeway Inc. P.O. Box 29097 Phoenix, AZ 85038 Tel: 623-869-4551 Fax: 925-467-3214 Trade Debt $1,165,433 Rosetta Resources Operating LP 717 Texas Avenue, Suite 2800 Houston, TX 77002 Tel: 713-830-2000 Fax: 713-830-&749 Trade Debt $1,086,787 Equity Oil Company 1700 Broadway, Suite 2300 Denver, CO 80290-2300 Trade Debt $1,047,624 Slawson Exploration Company, Inc. 1675 Broadway, Suite 1600 Denver, CO 80202-1675 Trade Debt $1,045,671 Brigham Oil & Gas, L.P. Bldg. 2, Suite 500 6300 Bridgeport Parkway Austin, TX 78730 Trade Debt $1,028,280 Deutsche Bank Trust Company Americas Global Loan Operations Standby Letter of Credit Unit New York, NY 10005 Attn: Mary Jo Jones Trade Debt $1,023,585 Alline Ford Brown Trust U/A NationsBank of Texas ATTN: Mr. Don Onstott P.O. Box 830241 Dallas, TX 75283-0241 Trade Debt $1,023,443 Arena Capital, Ltd 16 Beachside Common Westport, CT 06880 Trade Debt $1,012,163 Science Applications Int'l Corp. PO Box 223058 Pittsburgh, PA 15251-2058 Attn: Dave Leland/Matt Biros Trade Debt $992,439 Southern Natural Gas Company PO Box 102502 Atlanta, GA 30368-0000 Tel: 205-325-7344 Fax: 205-326-2038 Trade Debt $990,291 Peter Scalamandre & Sons 157 Albany Avenue Freeport, NY 11520-4710 Trade Debt $958,652 Bonneville Power Administration Federal Reserve Bank Acct: #89001401 New York, NY 10006 Tel: 503-230-3340 Trade Debt $945,340 Toshiba International Corp 650 California Street, 29th Fl San Francisco, CA 94108 Trade Debt $923,587 Siemens Power Generation, Inc. Dept. Ch10169 Palatine, IL 60055-0169 Trade Debt $892,110 Keyspan Energy Delivery P.O. Box 888 Hicksville, NY 11815-0001 Trade Debt $860,871 Leading Edge Turbine Technologies Dept Tx 10069 PO Box 4703 Houston, TX 77210-4703 Fax: 281-821-7755 Trade Debt $821,928 GCE Industries Inc. P. 0. Box 6661 Ashland, VA 23005 Tel: 804-550-5191 Trade Debt $816,543 Nabors Drilling USA Inc PO Box 973527 Dallas, TX 75397-3527 Trade Debt $783,190 Jersey Central Power & Light PO Box 3687 Akron, OH 44309-3687 Tel: 800-662-3155 Trade Debt $746,669 Dell Marketing, L.P. c/o Dell USA LP PO Box 910916 Pasadena, CA 91110-0916 Attn: Lavina Tourani Tel: 800-762-9473 Trade Debt $741,956 Ivanhoe Energy (USA), Inc. 5060 California Avenue, Suite 400 Bakersfield, CA 93389 Trade Debt $726,443 Suny At Stony Brook Attn: Anita Kefelas 460 Administration Building Stony Brook, NY 11794-1151 Trade Debt $724,092 Hi-Tek Manufacturing Inc. 6050 Hi-Tek Court Mason, OH 45040 Tel: 513-459-1094 ext 109 Fax: 513-459-9882 Trade Debt $668,720 Tampa Electric Company 702 N. Franklin Street Tampa, FL 33602 Tel: 813-228-1256 Fax: 813-228-4922 Trade Debt $664,212 Contra Costa Water District Accounts Receivable Dept. 1331 Concord Avenue Concord, CA 94524 Trade Debt $663,080 Sempra 101 Ash Street, HQ11B San Diego, CA 92101-3017 Trade Debt $657,558 Credit Suisse First Boston Bank Of New York Acct. #8900387742 New York, NY 10008 Trade Debt $644,928 WestCoast Energy, Inc. 2200 The Dome Tower 333 - 7th Ave, SW Calgary, Alberta T2P 2Z1 Canada Tel: 403-699-1694 Fax: 403-699-168 Trade Debt $634,845 Tennessee Valley Authority 1101 Market Street Mr1d Chattanooga, TN 37402 Tel: 865-632-2481 Trade Debt $619,414 TRS Services, Inc. 2100 Skinner Road Houston, TX 77093 Fax: 713-692-5299 Trade Debt $601,968 Western Area Power Authority 114 Parkshore Drive Folsom, CA 95630 Trade Debt $586,680 City of Vernon 4305 Santa Fe Ave. Vernon, CA 90058 Tel: 323-583-8811 Fax: 323-581-1354 Trade Debt $578,285 ----------------------------------------------------------------- [00006] LIST OF CALPINE'S FIVE LARGEST SECURED CREDITORS ----------------------------------------------------------------- Value of Creditor Claim Amount Collateral -------- ------------ ---------- Wilmington Trust Company $1,192,086,806 Unknown Calpine Corporation 1100 North Market Street Mailcode 2301 Wilmington, DE 19890 Wilmington Trust Company $929,062,500 Unknown Calpine Corporation 1100 North Market Street Mailcode 2301 Wilmington, DE 19890 Goldman Sachs $746,028,000 Unknown Calpine Corporation 30 Hudson Street, 17th Floor Jersey City, NJ 07302 Wilmington Trust Company $699,721,209 Unknown Calpine Generating Company LLC 1100 North Market Street Mailcode 2301 Wilmington, DE 19890 Wilmington Trust Company $659,751,725 Unknown Calpine Corporation 1100 North Market Street Mailcode 2301 Wilmington, DE 19890 ----------------------------------------------------------------- [00007] SUMMARY OF CALPINE'S PUBLIC DEBT SECURITIES ----------------------------------------------------------------- Calpine Corp. and its debtor-affiliates provided the Bankruptcy Court with a three-page chart outlining the multiple layers of their secured and unsecured debt securities. A free copy of the Debtors' Schedule of Publicly Held Securities is available at: http://bankrupt.com/misc/CalpinePubliclyHeldSecurities.pdf ----------------------------------------------------------------- [00008] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF CASES ----------------------------------------------------------------- Rule 1015(b) of the Federal Rules of Bankruptcy Procedure provides, in relevant part, that "[i]f two or more petitions are pending in the same court by or against a debtor and an affiliate, the court may order joint administration of the estates." Calpine Corporation and its 77 debtor-affiliates are "affiliates" as that term is defined under Section 101(2) of the Bankruptcy Code, Eric N. Pryor, the Company's executive vice president, interim and deputy chief financial officer and corporate risk officer, tells the Court. Many of the motions, hearings and orders that will arise in Calpine's Chapter 11 cases will jointly affect each and every Debtor. If their cases are jointly administered, the Debtors will be able to reduce fees and costs resulting from the administration of their cases and ease the onerous administrative burden of having to file multiple and duplicative documents. Although the Debtors operate together, on an integrated basis, the assets and liabilities of each Debtor are separately maintained. To the extent specific information is needed as to a particular Debtor entity, Mr. Pryor says, the Debtors are able to access this information and reassemble it as may be required. The Debtors will continue to operate as separate and distinct legal entities, and propose to continue to maintain their books and records consistent with their prepetition practices. Joint administration, Mr. Pryor asserts, will avoid duplicative notices, applications, and orders, thereby saving the Debtors considerable time and expense. The rights of creditors will not be adversely affected because the Debtors seek only administrative, and not substantive, consolidation of their estates. The rights of all creditors will be enhanced by the reduced costs that will result from the joint administration of Calpine's chapter 11 cases. The Court also will be relieved of the burden of entering duplicative orders and maintaining duplicative files. Supervision of the administrative aspects of the Debtors' chapter 11 cases by the United States Trustee for the Southern District of New York will be simplified. The Debtors will consult with the U.S. Trustee for authority to file the monthly operating reports required by the U.S. Trustee's Operating Guidelines on a consolidated basis. The Debtors believe that consolidated reports would further administrative economy and efficiency without prejudice to any party-in-interest and that those reports would accurately reflect the Debtors' consolidated business operations and financial affairs. Accordingly, the Court orders that the Debtors' chapter 11 cases will be consolidated for procedural purposes only and will be administered jointly under Case No. 05-60200. Judge Lifland rules that all pleadings and papers filed in the Debtors' cases will be captioned: UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK _______________________________ ) In re: ) ) Chapter 11 Calpine Corporation., et al., ) ) Case No. 05-60200 (BRL) Debtors. ) Jointly Administered _______________________________) ----------------------------------------------------------------- [00009] S&P ASSIGNS "D" RATINGS AFTER CALPINE'S CHAPTER 11 FILING ----------------------------------------------------------------- NEW YORK, New York -- December 21, 2005 -- Standard & Poor's Rating Services lowered its ratings on electric power giant Calpine Corp. and some of its subsidiaries to 'D' after the company filed for Chapter 11 bankruptcy protection. The San Jose, Calif.-based company, which develops, acquires, owns, and operates power generation facilities, has about $18 billion of total debt outstanding. At the same time, the recovery ratings for Calpine and its subsidiaries remain at their current level, but are placed on CreditWatch with negative implications. Standard & Poor's will review any financials and restructuring plans that may become available to assess the effect on recovery prospects. If sufficient information is not available in the near term, Standard & Poor's will withdraw the recovery ratings. The company is seeking $2 billion in debtor-in-possession (DIP) financing. "The negative CreditWatch listings reflect concerns about the size and terms of the potential DIP financing, and about the potential accommodations that junior lenders could receive in connection with the DIP," said Standard & Poor's credit analyst Jeffrey Wolinsky. Under Standard & Poor's assumptions, the bankruptcy filing could potentially eliminate up to $1.2 billion in annual cash interest expense. If Calpine does in fact need $2 billion of DIP financing to remain viable, then the liquidity position may have deteriorated materially since the 12-month period ended Sept. 30, 2005. In addition, a $2 billion DIP financing could significantly affect the recovery on the second-lien debt. The second-lien Calpine debtholders have challenged the DIP on the grounds that their collateral interests are not protected. Excessive legal costs associated with the bankruptcy could affect the recovery ratings. Historically, our recovery ratings assume that value is distributed to claimants on the basis of absolute priority. Offsetting this may be the potential for some creditors to extract accommodations in connection with the DIP. Junior creditors could receive higher levels of recovery than anticipated, at the expense of the senior creditors. In addition, the ratings on all of the Calpine debt and preferred stock was lowered to 'D' and the debt on most of Calpine's subsidiaries were lowered to 'D', with some exceptions. The ratings on Calpine Construction Finance Co. L.P. remains unchanged at 'CCC-', because this entity was excluded from the bankruptcy filing. However, there is a possibility that this entity could be filed in the future. In addition, the ratings on Rocky Mountain Energy Center LLC and Riverside Energy Center LLC were lowered to 'CCC' from 'B-'. Although the projects are structured as bankruptcy-remote, special-purpose entities that meet Standard & Poor's ring-fencing criteria, the risk remains that these wholly owned Calpine subsidiaries could be included in a future filing. Also, the ratings on Power Contract Financing LLC (PCF) remain at 'BBB' and the Standard & Poor's underlying rating (SPUR) on Gilroy Energy Center LLC remains at 'BBB-'. However, the outlooks on both ratings were changed to negative from stable because now that Calpine has actually filed for bankruptcy, both companies are at greater risk of consolidation into the bankruptcy. PCF meets Standard & Poor's criteria for special- purpose entities. The LLC agreement provides for two independent directors whose votes are needed in matters of interest to bondholders. Because Calpine Energy Services has completely extricated itself from the structure, Standard & Poor's rates the structure almost independently of Calpine's rating. In addition, Gilroy Energy's ratings are not affected because Calpine sold a significant portion of its equity interest in the project. Standard & Poor's delinked the bond rating from the rating on Calpine. Having an equity partner greatly reduces Gilroy Energy's risk of a substantive consolidation in a Calpine bankruptcy scenario because the equity sale gives the second owner substantial voting and ownership rights to block a consolidation. ----------------------------------------------------------------- [00010] FITCH CUTS CALPINE RATINGS TO "D" ON BANKRUPTCY FILING ----------------------------------------------------------------- NEW YORK, New York -- December 21, 2005 -- Fitch Ratings has downgraded Calpine Corp.'s (CPN) issuer default rating (IDR) to 'D' from 'CC' following the company's filing of Chapter 11 bankruptcy on Dec. 20, 2005. The Negative Rating Outlook is removed. Ratings on CPN and unit Calpine Canada Energy Finance ULC (senior unsecured debt guaranteed by CPN) remain unchanged as follows: -- First-priority secured notes 'B/RR1'; -- Second-priority secured notes 'B-/RR1'; -- Senior unsecured and convertible notes 'CC/RR5'. The debt instrument ratings and recovery ratings reflect Fitch's analysis of the ultimate recovery prospects of individual creditor classes following the bankruptcy process. The recovery analysis for CPN was published by Fitch on Dec. 1, 2005. Based on this analysis, Fitch estimates strong recovery prospects in the range of 90% to 100% of par value for the First-priority and Second-priority secured notes, and rather weak recovery prospects, in the range of 11% to 30% of par, for the senior unsecured and convertible note holders. CPN's decline has been over a protracted period of time and Fitch expects little disruption to the power markets from its demise. At the same time, with approximately 28,000 megawatts of net generating capacity in operation, CPN remains a major supplier of power in certain regions such as Texas and California, and a large counterparty to many utilities and municipal, cooperative and public power entities. Many of CPN's power sales agreements are at prices significantly below market and already California has petitioned the FERC to compel CPN to continue to supply power in accordance with the original terms. Fitch will continue to monitor the credit and market implications of CPN's bankruptcy ----------------------------------------------------------------- [00011] CALPINE RESTRUCTURING GOOD NEWS FOR N. AMERICAN MARKET ----------------------------------------------------------------- BOULDER, Colorado -- December 21, 2005 -- Concerns over Calpine's ongoing operations after declaring bankruptcy today are likely overstated according to Global Energy Decisions. "Calpine can now shift from a frantic search for cash to keep the lights on in the short-term, to dealing with the longer-term restructuring of the company and its assets," said Gary Hunt, president, Global Energy Advisors, a Global Energy Decisions business unit. "Contrary to some analysts' position, we believe that the bankruptcy and its debtor-in-possession financing creates a more stable near term situation for Calpine's customers and quickens the resolution of the structural problems facing Calpine." Calpine's bankruptcy also comes at a time of unprecedented opportunity in North American power generation markets. "With the repeal of the Public Utilities Holding Company Act (PUCHA) and the upswing in generation markets, Calpine's assets will be very attractive to North American market participants or international investors seeking to enter North American markets," Hunt said. The bankruptcy process allows for a rationalizing of the long term contracts and the asset portfolio. Calpine's portfolio consists of newer, efficient, clean, gas fired generation many with favorable market conditions if restructuring the debt makes these units more competitive. "Calpine's bankruptcy filing is another signpost that we are completing the circle of the correction stage of the power business cycle setting the stage for the next growth phase for the industry. Many players who entered the merchant energy sector have folded or been acquired. A few stronger players are emerging from the restructuring process leaner and very competitive. While investors and hedge funds who speculated in Calpine's stock now scramble to cover their assets, the restructuring process now beginning will focus on how to optimize the value of the asset portfolio for the creditors and whether doing so keeps Calpine whole or breaks it up only time will tell," Hunt said. Download a complimentary map of Calpine's assets at http://www.globalenergy.com/ About Global Energy Decisions Global Energy provides energy organizations with solutions based on a common framework of software applications, energy markets data, and advisory services to enable energy professionals to forecast electricity pricing and demand, conduct resource planning, perform strategic studies and competitor analysis, manage risk, trade energy and schedule delivery, and optimize generation performance. ----------------------------------------------------------------- [00012] CLECO READY TO PROTECT INTERESTS IN CALPINE BANKRUPTCY ----------------------------------------------------------------- PINEVILLE, Louisiana -- December 21, 2005 -- Cleco Corp. (NYSE:CNL) is prepared to protect its interests in Calpine Corp.'s bankruptcy proceedings. Calpine Corp. and many of its subsidiaries, including Calpine Acadia Holdings LLC (CAH) and Calpine Energy Services, L.P. (CES), filed for Chapter 11 bankruptcy protection Tuesday in New York City. Acadia Power Holdings LLC (APH), a wholly owned subsidiary of Cleco, and CAH hold 50 percent interests in Acadia Power Partners LLC (APP), which owns the 1,160-megawatt, natural gas- fired Acadia power plant in Eunice, La. CES is a party to two 20- year tolling agreements for the plant's output. "Calpine's decision to file for bankruptcy is unfortunate, but we're not surprised. We've been preparing for this possibility for quite some time," Cleco President and CEO Michael Madison said Wednesday. "Under the terms of the LLC agreement, APH receives preferred cash and income distributions from APP, which help preserve the value of our stake in the project. "We're also prepared should CES reject the tolling agreements for the plant. We will actively work to realize the value of the plant, both through marketing its output and by optimizing the asset itself, if necessary," Madison said. In addition, it is unclear if Calpine's bankruptcy filing will have an impact on Cleco Power's contract to purchase 200 megawatts from CES beginning Jan. 1, 2006. "Cleco Power already has begun exploring alternatives to ensure it has access to capacity to replace the CES contract, if necessary," Madison said. Cleco Corp. is a regional energy services provider headquartered in Pineville, La. It operates a regulated electric utility company that serves approximately 265,000 customers across Louisiana. Cleco also operates a wholesale energy business with nearly 1,400 megawatts of generating capacity. For more information, visit http://www.cleco.com/ ----------------------------------------------------------------- [00013] CALPINE POWER RESPONDS TO CALPINE CH. 11 & CCAA FILINGS ----------------------------------------------------------------- CALGARY, Canada -- December 21, 2005 -- Calpine Corporation ("Calpine")(PINK SHEETS:CPNL) announced on December 20, 2005 that it has filed for voluntary reorganization under Chapter 11 of the US Bankruptcy Code and that certain of its subsidiaries and affiliates in Canada intend to file under the Canadian Companies' Creditors Arrangement Act in Canada. These proceedings apply to some but not all Calpine entities that are central to Calpine Power Income Fund (the "Fund")(TSX:CF.UN). All Calpine entities are currently up-to-date on their obligations to the Fund. Calpine and its affiliates continue in their roles as Manager of the Fund and operator of the Fund's Island Cogen facility, Calgary Energy Centre and King City Cogen facility. The Fund is in a strong cash position and is currently assessing what impact, in any, these proceedings will have on future cash distributions. Certain subsidiaries of Calpine that are central to the Fund in Canada have been named in these proceedings. These are Calpine Canada Power Ltd., which manages the business of the Fund and its subsidiaries, operates certain facilities of the Fund and has borrowed money from a subsidiary of the Fund (the "Manager loan"), and Calpine Energy Services Canada Partnership, which is party to a tolling agreement with a subsidiary of the Fund that is related to the Fund's Calgary Energy Centre (the "Tolling Agreement"). The Fund is currently assessing what effect, if any, these proceedings may have on these cash flows. Certain other subsidiaries of Calpine that are central to the Fund have not been named in these proceedings. These are Calpine King City Cogen LLC, which leases the King City cogeneration facility in California from a subsidiary of the Fund pursuant to a long term lease, and Calpine Canada Whitby Holdings Company which owns a 50% interest in the Whitby power plant in Ontario and has borrowed money from a subsidiary of the Fund, which is the Fund's participating loan interest in this facility. Calpine's only relationship with the Fund's Island Cogen facility is that of operator. The Fund is working with independent legal counsel, financial advisors, and other consultants to assess all possible implications of these proceedings on the Fund, and will be monitoring all Calpine's obligations with respect to the Fund. In particular, the Fund and its advisors will be evaluating any impact on the Tolling agreement and the Manager loan, and evaluating a range of options available in the event of a Calpine default of either obligation. The Fund is committed to ensuring all its unitholders are kept up-to-date, and will provide updates to investors and analysts as more information becomes available. Calpine Power Income Fund is an unincorporated open-ended trust that invests in electrical power assets. The Fund indirectly owns interests in power generating facilities in British Columbia, Alberta and California. In addition, the Fund owns a participating loan interest in a power plant in Ontario and a promissory note issued by Calpine Canada Power Ltd. The Fund is managed by Calpine Canada Power Ltd., which is headquartered in Calgary, Alberta. The Calpine Power Income Fund units are listed on the Toronto Stock Exchange under the symbol CF.UN. ----------------------------------------------------------------- [00014] NORTHLAND POWER EVALUATES IMPACT OF CALPINE BANKRUPTCY ----------------------------------------------------------------- TORONTO, Canada -- December 21, 2005 -- Northland Power Income Fund (TSX:NPI.UN)(TSX:NPI.DB) announced today that, in response to an announcement by Calpine Corp. late yesterday that it has filed for bankruptcy protection in the United States, the Fund has evaluated the potential impact on its distributable cash of a delivery default by a Calpine affiliate under one of the Fund's natural-gas supply contracts. The Fund's Iroquois Falls facility has long-term contracts for natural gas supply with EnCana Corporation, Shell Canada Limited, and Calpine Canada Natural Gas Partnership ("Calpine"), an affiliate of Calpine Corp. A substantial portion of the Calpine supply obligation is backstopped under one of the Fund's other long-term gas supply contracts. The Fund's exposure to Calpine is 5% of its Iroquois Falls contracted gas supply net of the backstop, and 18% before the backstop. Management estimates that the adverse impact on the Fund's distributable cash of a supply default by Calpine would be approximately $0.04 per trust unit after taking account of the backstop arrangement, and potentially less if other mitigating actions can be taken. At this time, Calpine continues to supply gas under the terms of the contract. The Fund expects to generate distributable cash in 2005 of approximately $1.22 per trust unit from continuing operations ($1.33 after accounting for the impact of the sale of the Rosemary plant in February), considerably in excess of the $1.05 in distributions to Unitholders previously announced for 2005. Any default by Calpine in delivering gas is not expected to have an impact on the amount of distributions to Unitholders. Northland Power Income Fund indirectly owns interests in four power generating facilities: three combined-cycle cogeneration power plants that efficiently and cleanly produce electricity and steam for sale, and one wind power project. Two cogeneration plants are located in Ontario: the 120 MW Iroquois Falls facility that has been wholly-owned by the Fund since its inception in 1997, and the 110 MW Kingston facility, of which the Fund owns 50%. Through its 19% equity interest in Panda Energy Corp. (PEC) and loan to a PEC subsidiary, the Fund has an interest in the 230 MW Panda-Brandywine cogeneration power plant located outside Washington, D.C. Electricity sales from the cogeneration plants are made under long-term power purchase agreements (PPAs) with creditworthy customers to ensure revenue stability, and long-term contracts assure the supply and price of natural gas, which is the Fund's largest cost. The 54 MW Mont Miller wind power project supplies power to Hydro-Quebec under the terms of a 21-year PPA. The Fund's trust units and convertible debentures, which trade on the Toronto Stock Exchange under the symbols NPI.UN and NPI.DB respectively, are qualified investments for RRSPs and DPSPs under the Canadian Income Tax Act. *** End of Issue No. 1 ***