v2.4.0.8

Debt | 12 Months Ended
--- | ---
Dec. 31, 2013
Debt Disclosure [Abstract] |
Debt | Debt Our debt at December 31, 2013 and 2012, was as follows (in millions):
| 2013 |  | 2012
First Lien Notes | $ | 4,989 |  |  | $ | 5,303 |
First Lien Term Loans | 2,828 |  |  | 2,463 |
Project financing, notes payable and other | 1,901 |  |  | 1,789 |
CCFC Term Loans | 1,191 |  |  | — |
CCFC Notes | — |  |  | 978 |
Capital lease obligations | 203 |  |  | 217 |
Subtotal | 11,112 |  |  | 10,750 |
Less: Current maturities | 204 |  |  | 115 |
Total long-term debt | $ | 10,908 |  |  | $ | 10,635 |
Our debt agreements contain covenants which could permit lenders to accelerate the repayment of our debt by providing notice, the lapse of time, or both, if certain events of default remain uncured after any applicable grace period. We were in compliance with all of the covenants in our debt agreements at December 31, 2013. Annual Debt Maturities Contractual annual principal repayments or maturities of debt instruments as of December 31, 2013, are as follows (in millions):
2014 | $ | 205 |
2015 | 183 |
2016 | 194 |
2017 | 550 |
2018 | 1,717 |
Thereafter | 8,291 |
Subtotal | 11,140 |
Less: Discount | 28 |
Total debt | $ | 11,112 |
First Lien Notes Our First Lien Notes are summarized in the table below (in millions, except for interest rates):
| Outstanding at December 31, |  | Weighted Average Effective Interest Rates(3)
| 2013 |  | 2012 |  | 2013 |  | 2012
2017 First Lien Notes(1) | $ | — |  |  | $ | 1,080 |  |  | — | % |  | 7.5 | %
2019 First Lien Notes(2) | 320 |  |  | 360 |  |  | 8.2 |  |  | 8.2 |
2020 First Lien Notes(2) | 875 |  |  | 983 |  |  | 8.2 |  |  | 8.1 |
2021 First Lien Notes(2) | 1,600 |  |  | 1,800 |  |  | 7.7 |  |  | 7.7 |
2022 First Lien Notes(1) | 744 |  |  | — |  |  | 6.2 |  |  | — |
2023 First Lien Notes(2) | 960 |  |  | 1,080 |  |  | 8.0 |  |  | 8.0 |
2024 First Lien Notes(2) | 490 |  |  | — |  |  | 5.9 |  |  | — |
Total First Lien Notes | $ | 4,989 |  |  | $ | 5,303 |  |  |  |  |
____________
(1) | On October 17, 2013, we launched a tender offer to repay our 2017 First Lien Notes with the proceeds from our 2020 First Lien Term Loan and 2022 First Lien Notes which are described in further detail below. On October 31, 2013, following the early tender and consent date of the tender offer, we purchased approximately $742 million in aggregate principal amount of our 2017 First Lien Notes and issued a redemption notice to the remaining holders of our 2017 First Lien Notes that did not tender their notes in the tender offer. The tender offer expired on November 29, 2013 and we purchased the remaining $338 million in aggregate principal amount of our 2017 First Lien Notes tendered prior to the expiration of the tender offer, and redeemed any remaining 2017 First Lien Notes on December 2, 2013.
(2) | On October 31, 2013, we issued $490 million in aggregate principal amount of our 2024 First Lien Notes and used the proceeds to redeem 10% of the original aggregate principal amount of our 2019 First Lien Notes, 2020 First Lien Notes, 2021 First Lien Notes and 2023 First Lien Notes at a redemption price of 103% of the principal amount redeemed, plus accrued and unpaid interest.
(3) | Our weighted average interest rate calculation includes the amortization of deferred financing costs and debt discount.
Our First Lien Notes are secured equally and ratably with indebtedness incurred under our First Lien Term Loans and Corporate Revolving Facility, subject to certain exceptions and permitted liens, on substantially all of our and certain of the guarantors’ existing and future assets. Additionally, our First Lien Notes rank equally in right of payment with all of our and the guarantors’ other existing and future senior indebtedness, and will be effectively subordinated in right of payment to all existing and future liabilities of our subsidiaries that do not guarantee our First Lien Notes. Subject to certain qualifications and exceptions, our First Lien Notes will, among other things, limit our ability and the ability of the guarantors to:
• | incur or guarantee additional first lien indebtedness;
• | enter into certain types of commodity hedge agreements that can be secured by first lien collateral;
• | enter into sale and leaseback transactions;
• | create or incur liens; and
• | consolidate, merge or transfer all or substantially all of our assets and the assets of our restricted subsidiaries on a combined basis.
2022 First Lien Notes On October 31, 2013, we issued $750 million in aggregate principal amount of 6.0% senior secured notes due 2022 in a private placement. The 2022 First Lien Notes bear interest at 6.0% payable semi-annually on January 15 and July 15 of each year, beginning on July 15, 2014. We used the net proceeds received, together with the proceeds from the 2020 First Lien Term Loan, to repay the 2017 First Lien Notes during the fourth quarter of 2013. The 2022 First Lien Notes mature on January 15, 2022. The 2022 First Lien Notes were offered to investors at an issue price equal to 99.193% of face value and contain substantially similar covenants, qualifications, exceptions and limitations as the First Lien Notes. We recorded approximately $12 million in deferred financing costs related to our 2022 First Lien Notes and approximately $51 million of debt extinguishment costs associated with the redemption premium and write-off of unamortized deferred financing costs related to the repayment of our 2017 First Lien Notes during the fourth quarter of 2013. 2024 First Lien Notes On October 31, 2013, we issued $490 million in aggregate principal amount of 5.875% senior secured notes due 2024 in a private placement. The 2024 First Lien Notes bear interest at 5.875% payable semi-annually on January 15 and July 15 of each year, beginning on January 15, 2014. We used the net proceeds received from this issuance to redeem 10% of the original aggregate principal amount of our 2019 First Lien Notes, 2020 First Lien Notes, 2021 First Lien Notes and 2023 First Lien Notes at a redemption price of 103% of the principal amount redeemed, plus accrued and unpaid interest. The 2024 First Lien Notes mature on January 15, 2024. The 2024 First Lien Notes contain substantially similar covenants, qualifications, exceptions and limitations as the First Lien Notes. We recorded approximately $8 million in deferred financing costs related to our 2024 First Lien Notes and approximately $20 million of debt extinguishment costs associated with the redemption premium and write-off of unamortized deferred financing costs and discount during the fourth quarter of 2013. First Lien Term Loans Our First Lien Term Loans are summarized in the table below (in millions, except for interest rates):
| Outstanding at December 31, |  | Weighted Average Effective Interest Rates(1)
| 2013 |  | 2012 |  | 2013 |  | 2012
2018 First Lien Term Loans | $ | 1,614 |  |  | $ | 1,630 |  |  | 4.3 | % |  | 4.7 | %
2019 First Lien Term Loan | 824 |  |  | 833 |  |  | 4.5 |  |  | 4.7 |
2020 First Lien Term Loan | 390 |  |  | — |  |  | 4.3 |  |  | — |
Total First Lien Term Loans | $ | 2,828 |  |  | $ | 2,463 |  |  |  |  |
____________
(1) | Our weighted average interest rate calculation includes the amortization of deferred financing costs and debt discount.
Our First Lien Term Loans provide for senior secured term loan facilities and bear interest, at our option, at either (i) the base rate, equal to the higher of the Federal Funds effective rate plus 0.5% per annum or the Prime Rate (as such terms are defined in the First Lien Term Loans credit agreements), plus an applicable margin of 2.0%, or (ii) LIBOR plus 3.0% per annum subject to a LIBOR floor of 1.0%. An aggregate amount equal to 0.25% of the aggregate principal amount of the First Lien Term Loans will be payable at the end of each quarter with the remaining balance payable on the maturity date. The First Lien Term Loans are subject to certain qualifications and exceptions, similar to our First Lien Notes. The 2018 First Lien Term Loans have a maturity date of April 1, 2018. The 2019 First Lien Term Loan carries substantially the same terms as the 2018 First Lien Term Loans and matures on October 9, 2019. 2020 First Lien Term Loan On October 23, 2013, we entered into our $390 million 2020 First Lien Term Loan. We used the net proceeds received, together with the proceeds from the 2022 First Lien Notes to repay the 2017 First Lien Notes during the fourth quarter of 2013. The 2020 First Lien Term Loan matures on October 31, 2020 and carries substantially the same terms as the First Lien Term Loans. The 2020 First Lien Term Loan also contains substantially similar covenants, qualifications, exceptions and limitations as the First Lien Term Loans and First Lien Notes. We recorded approximately $6 million in deferred financing costs during the fourth quarter of 2013 related to the issuance of the 2020 First Lien Term Loan. Project Financing, Notes Payable and Other The components of our project financing, notes payable and other are (in millions, except for interest rates):
| Outstanding at December 31, |  | Weighted Average Effective Interest Rates(1)
| 2013 |  | 2012 |  | 2013 |  | 2012
Russell City Project Debt due 2023 | $ | 593 |  |  | $ | 507 |  |  | 4.9 | % |  | 3.6 | %
Steamboat due 2017 | 418 |  |  | 428 |  |  | 6.8 |  |  | 6.8 |
OMEC due 2019 | 335 |  |  | 345 |  |  | 6.9 |  |  | 6.8 |
Los Esteros Project Debt due 2023 | 305 |  |  | 209 |  |  | 3.4 |  |  | 3.5 |
Pasadena(2) | 135 |  |  | 160 |  |  | 8.9 |  |  | 8.9 |
Bethpage Energy Center 3 due 2020-2025(3) | 88 |  |  | 93 |  |  | 7.0 |  |  | 7.0 |
Gilroy note payable due 2014 | 15 |  |  | 33 |  |  | 11.2 |  |  | 10.8 |
Other | 12 |  |  | 14 |  |  | — |  |  | — |
Total | $ | 1,901 |  |  | $ | 1,789 |  |  |  |  |
_____________
(1) | Our weighted average interest rate calculation includes the amortization of deferred financing costs and debt discount or premium.
(2) | Represents a sale-leaseback transaction that is accounted for as financing transaction under U.S. GAAP.
(3) | Represents a weighted average of first and second lien loans for the weighted average effective interest rates.
Our project financings are collateralized solely by the capital stock or partnership interests, physical assets, contracts and/or cash flows attributable to the entities that own the power plants. The lenders’ recourse under these project financings is limited to such collateral. CCFC Term Loans and Repayment of CCFC Notes Our CCFC Term Loans and CCFC Notes are summarized in the table below (in millions, except for interest rates):
| Outstanding at December 31, |  | Weighted Average Effective Interest Rates(1)
| 2013 |  | 2012 |  | 2013 |  | 2012
CCFC Term Loans | $ | 1,191 |  |  | $ | — |  |  | 3.3 | % |  | — | %
CCFC Notes | — |  |  | 978 |  |  | — |  |  | 8.9 |
Total CCFC Term Loans and CCFC Notes | $ | 1,191 |  |  | $ | 978 |  |  |  |  |
____________
(1) | Our weighted average interest rate calculation includes the amortization of deferred financing costs and debt discount.
CCFC Term Loans On May 3, 2013, CCFC entered into a credit agreement providing for a first lien senior secured term loan facility comprised of (i) a $900 million 7-year term loan and (ii) a $300 million 8.5-year term loan. CCFC utilized the proceeds received from the CCFC Term Loans to redeem the entire $1.0 billion in principal amount of CCFC Notes at a redemption price equal to 104% (plus accrued and unpaid interest), to pay related transaction expenses and for corporate purposes, as described in the credit agreement. The CCFC Notes were redeemed on June 3, 2013, at which date the CCFC Term Loans were fully drawn. The CCFC Term Loans bear interest, at CCFC’s option, at either (i) the Base Rate, equal to the higher of the Federal Funds Effective Rate plus 0.50% per annum or the Prime Rate (as such terms are defined in the Credit Agreement), plus an applicable margin of (a) 1.25% per annum with respect to the 7-year term loan and (b) 1.50% per annum with respect to the 8.5-year term loan, or (ii) LIBOR plus (a) 2.25% per annum with respect to the 7-year term loan and (b) 2.50% per annum with respect to the 8.5-year term loan (in each case subject to a LIBOR floor of 0.75%). The term loans were offered to investors at an issue price equal to 99.75% of face value. An amount equal to 0.25% of the aggregate principal amount of the CCFC Term Loans are payable at the end of each quarter commencing in September 2013, with the remaining balance payable on the relevant maturity date (May 3, 2020 with respect to the 7-year term loan and January 31, 2022 with respect to the 8.5-year term loan). CCFC may elect from time to time to convert all or a portion of the CCFC Term Loans from LIBOR loans to Base Rate loans or vice versa. In addition, CCFC may at any time, and from time to time, prepay the term loans, in whole or in part, without premium or penalty, upon irrevocable notice to the administrative agent. The CCFC Term Loans are secured by certain real and personal property of CCFC consisting primarily of six natural gas-fired power plants. The CCFC Term Loans are not guaranteed by Calpine Corporation and are without recourse to Calpine Corporation or any of our non-CCFC subsidiaries or assets; however, CCFC generates the majority of its cash flows from an intercompany tolling agreement with Calpine Energy Services, L.P. and has various service agreements in place with other subsidiaries of Calpine Corporation. In connection with the redemption of the CCFC Notes, we recorded $68 million in debt extinguishment costs associated with prepayment penalties and the write-off of unamortized debt discount and deferred financing costs during the year ended December 31, 2013. We also recorded $15 million in new deferred financing costs on our Consolidated Balance Sheet during 2013 associated with the issuance of the CCFC Term Loans. Capital Lease Obligations The following is a schedule by year of future minimum lease payments under capital leases and a failed sale-leaseback transaction related to our Pasadena Power Plant together with the present value of the net minimum lease payments as of December 31, 2013 (in millions):
| Sale-Leaseback Transactions(1) |  | Capital Lease |  | Total
2014 | $ | 25 |  |  | $ | 51 |  |  | $ | 76 |
2015 | 25 |  |  | 38 |  |  | 63 |
2016 | 25 |  |  | 40 |  |  | 65 |
2017 | 17 |  |  | 38 |  |  | 55 |
2018 | 21 |  |  | 37 |  |  | 58 |
Thereafter | 106 |  |  | 125 |  |  | 231 |
Total minimum lease payments | 219 |  |  | 329 |  |  | 548 |
Less: Amount representing interest | 84 |  |  | 126 |  |  | 210 |
Present value of net minimum lease payments | $ | 135 |  |  | $ | 203 |  |  | $ | 338 |
____________
(1) | Amounts are accounted for as financing transactions under U.S. GAAP and are included in our project financing, notes payable and other amounts above.
The primary types of property leased by us are power plants and related equipment. The leases generally provide for the lessee to pay taxes, maintenance, insurance, and certain other operating costs of the leased property. The remaining lease terms range up to 35 years (including lease renewal options). Some of the lease agreements contain customary restrictions on dividends up to Calpine Corporation, additional debt and further encumbrances similar to those typically found in project financing agreements. At December 31, 2013 and 2012, the asset balances for the leased assets totaled approximately $862 million and $880 million with accumulated amortization of $343 million and $312 million, respectively. Amortization of assets under capital leases is recorded in depreciation and amortization expense on our Consolidated Statements of Operations. See Note 15 for discussion of capital leases guaranteed by Calpine Corporation. Corporate Revolving Facility and Other Letters of Credit Facilities The table below represents amounts issued under our letter of credit facilities at December 31, 2013 and 2012 (in millions):
| 2013 |  | 2012
Corporate Revolving Facility | $ | 242 |  |  | $ | 243 |
CDHI | 218 |  |  | 253 |
Various project financing facilities | 170 |  |  | 130 |
Total | $ | 630 |  |  | $ | 626 |
On June 27, 2013, we executed Amendment No.1 to the Corporate Revolving Facility. Certain key terms of the amendment are listed below:
• | the applicable margin has been reduced from 3.25% to 2.25% for LIBOR rate borrowings and from 2.25% to 1.25% for base rate borrowings;
• | the fee on the undrawn commitment has been reduced from 0.75% to 0.50%; and
• | the maturity date of the Corporate Revolving Facility has been extended to June 27, 2018.
The Corporate Revolving Facility represents our primary revolving facility. Borrowings under the Corporate Revolving Facility bear interest, at our option, at either a base rate or LIBOR rate. Base rate borrowings shall be at the base rate, plus an applicable margin ranging from 1.00% to 1.25% as provided in the Corporate Revolving Facility credit agreement. Base rate is defined as the higher of (i) the Federal Funds Effective Rate, as published by the Federal Reserve Bank of New York, plus 0.50% and (ii) the rate the administrative agent announces from time to time as its prime per annum rate. LIBOR rate borrowings shall be at the British Bankers’ Association Interest Settlement Rates for the interest period as selected by us as a one, two, three, six or, if agreed by all relevant lenders, nine or twelve month interest period, plus an applicable margin ranging from 2.00% to 2.25%. Interest payments are due on the last business day of each calendar quarter for base rate loans and the earlier of (i) the last day of the interest period selected or (ii) each day that is three months (or a whole multiple thereof) after the first day for the interest period selected for LIBOR rate loans. Letter of credit fees for issuances of letters of credit include fronting fees equal to that percentage per annum as may be separately agreed upon between us and the issuing lenders and a participation fee for the lenders equal to the applicable interest margin for LIBOR rate borrowings. Drawings under letters of credit shall be repaid within two business days or be converted into borrowings as provided in the Corporate Revolving Facility credit agreement. We incur an unused commitment fee ranging from 0.25% to 0.50% on the unused amount of commitments under the Corporate Revolving Facility. The Corporate Revolving Facility does not contain any requirements for mandatory prepayments, except in the case of certain designated asset sales in excess of $3.0 billion in the aggregate. However, we may voluntarily repay, in whole or in part, the Corporate Revolving Facility, together with any accrued but unpaid interest, with prior notice and without premium or penalty. Amounts repaid may be reborrowed, and we may also voluntarily reduce the commitments under the Corporate Revolving Facility without premium or penalty. The Corporate Revolving Facility matures on June 27, 2018. The Corporate Revolving Facility is guaranteed and secured by each of our current domestic subsidiaries that was a guarantor under the First Lien Credit Facility and will also be additionally guaranteed by our future domestic subsidiaries that are required to provide such a guarantee in accordance with the terms of the Corporate Revolving Facility. The Corporate Revolving Facility ranks equally in right of payment with all of our and the guarantors’ other existing and future senior indebtedness and will be effectively subordinated in right of payment to all existing and future liabilities of our subsidiaries that do not guarantee the Corporate Revolving Facility. The Corporate Revolving Facility also requires compliance with financial covenants that include a minimum cash interest coverage ratio and a maximum net leverage ratio. CDHI We have $300 million letter of credit facility related to CDHI which matures on January 2, 2016. As a result of the completion of the sale of Riverside Energy Center, LLC, a wholly-owned subsidiary of CDHI, on December 31, 2012, we are required to cash collateralize letters of credit issued in excess of $225 million until replacement collateral is contributed to the CDHI collateral package, which we are in the process of arranging. At December 31, 2013, we had no outstanding letters of credit issued in excess of $225 million under our CDHI letter of credit facility that were collateralized by cash. Fair Value of Debt We record our debt instruments based on contractual terms, net of any applicable premium or discount. We did not elect to apply the alternative U.S. GAAP provisions of the fair value option for recording financial assets and financial liabilities. The following table details the fair values and carrying values of our debt instruments at December 31, 2013 and 2012 (in millions):
| 2013 |  | 2012
| Fair Value |  | Carrying Value |  | Fair Value |  | Carrying Value
First Lien Notes | $ | 5,317 |  |  | $ | 4,989 |  |  | $ | 5,863 |  |  | $ | 5,303 |
First Lien Term Loans | 2,845 |  |  | 2,828 |  |  | 2,489 |  |  | 2,463 |
Project financing, notes payable and other(1) | 1,772 |  |  | 1,766 |  |  | 1,599 |  |  | 1,629 |
CCFC Term Loans | 1,179 |  |  | 1,191 |  |  | — |  |  | — |
CCFC Notes | — |  |  | — |  |  | 1,075 |  |  | 978 |
Total | $ | 11,113 |  |  | $ | 10,774 |  |  | $ | 11,026 |  |  | $ | 10,373 |
____________
(1) | Excludes a lease that is accounted for as a failed sale-leaseback transaction under U.S. GAAP.
On January 1, 2012, we adopted Accounting Standards Update 2011-04 “Fair Value Measurement” which requires the categorization by level of the fair value hierarchy for items not measured at fair value on our Consolidated Balance Sheets but for which fair value is required to be disclosed. We measure the fair value of our First Lien Notes, First Lien Term Loans, CCFC Term Loans and CCFC Notes using market information, including quoted market prices or dealer quotes for the identical liability when traded as an asset (categorized as level 2). We measure the fair value of our project financing, notes payable and other debt instruments using discounted cash flow analyses based on our current borrowing rates for similar types of borrowing arrangements (categorized as level 3). We do not have any debt instruments with fair value measurements categorized as level 1 within the fair value hierarchy.

X
- Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration