v3.3.1.900

Debt | 12 Months Ended
--- | ---
Dec. 31, 2015
Debt Disclosure [Abstract] |
Debt | Debt Our debt at December 31, 2015 and 2014, was as follows (in millions):
| 2015 |  | 2014
Senior Unsecured Notes | $ | 3,450 |  |  | $ | 2,800 |
First Lien Term Loans | 3,318 |  |  | 2,799 |
First Lien Notes | 1,809 |  |  | 2,075 |
Project financing, notes payable and other | 1,745 |  |  | 1,810 |
CCFC Term Loans | 1,580 |  |  | 1,596 |
Capital lease obligations | 187 |  |  | 202 |
Subtotal | 12,089 |  |  | 11,282 |
Less: Current maturities | 221 |  |  | 199 |
Total long-term debt | $ | 11,868 |  |  | $ | 11,083 |
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, 2015. Annual Debt Maturities Contractual annual principal repayments or maturities of debt instruments as of December 31, 2015, are as follows (in millions):
2016 | $ | 222 |
2017 | 210 |
2018 | 234 |
2019 | 1,618 |
2020 | 1,372 |
Thereafter | 8,464 |
Subtotal | 12,120 |
Less: Discount | 31 |
Total debt | $ | 12,089 |
Senior Unsecured Notes Our Senior Unsecured Notes are summarized in the table below (in millions, except for interest rates):
| Outstanding at December 31, |  | Weighted Average Effective Interest Rates(1)
| 2015 |  | 2014 |  | 2015 |  | 2014
2023 Senior Unsecured Notes | $ | 1,250 |  |  | $ | 1,250 |  |  | 5.6 | % |  | 5.6 | %
2024 Senior Unsecured Notes | 650 |  |  | — |  |  | 5.7 |  |  | — |
2025 Senior Unsecured Notes | 1,550 |  |  | 1,550 |  |  | 5.9 |  |  | 5.9 |
Total Senior Unsecured Notes | $ | 3,450 |  |  | $ | 2,800 |  |  |  |  |
____________
(1) | Our weighted average interest rate calculation includes the amortization of deferred financing costs.
In February 2015, we issued $650 million in aggregate principal amount of 5.5% senior unsecured notes due 2024 in a public offering. The 2024 Senior Unsecured Notes bear interest at 5.5% per annum with interest payable semi-annually on February 1 and August 1 of each year, beginning on August 1, 2015. The 2024 Senior Unsecured Notes were issued at par, mature on February 1, 2024 and contain substantially similar covenant, qualifications, exceptions and limitations as our 2023 Senior Unsecured Notes and 2025 Senior Unsecured Notes. We used the net proceeds received from the issuance of our 2024 Senior Unsecured Notes to replenish cash on hand used for the acquisition of Fore River Energy Center in the fourth quarter of 2014, to repurchase approximately $147 million of our 2023 First Lien Notes and for general corporate purposes. During the first quarter of 2015, we recorded approximately $9 million in deferred financing costs related to the issuance of our 2024 Senior Unsecured Notes and approximately $19 million in debt extinguishment costs related to the partial repurchase of our 2023 First Lien Notes. On July 22, 2014, we issued $1.25 billion in aggregate principal amount of 5.375% senior unsecured notes due 2023 and $1.55 billion in aggregate principal amount of 5.75% senior unsecured notes due 2025 in a public offering. The 2023 Senior Unsecured Notes bear interest at 5.375% per annum and the 2025 Senior Unsecured Notes bear interest at 5.75% per annum, in each case payable semi-annually on April 15 and October 15 of each year, beginning on April 15, 2015. The 2023 Senior Unsecured Notes mature on January 15, 2023 and the 2025 Senior Unsecured Notes mature on January 15, 2025. Our Senior Unsecured Notes were issued at par. Our Senior Unsecured Notes are:
• | general unsecured obligations of Calpine;
• | rank equally in right of payment with all of Calpine’s existing and future senior indebtedness;
• | effectively subordinated to Calpine’s secured indebtedness to the extent of the value of the collateral securing such indebtedness;
• | structurally subordinated to any existing and future indebtedness and other liabilities of Calpine’s subsidiaries; and
• | senior in right of payment to any of Calpine’s subordinated indebtedness.
We used the net proceeds received from the issuance of our 2023 Senior Unsecured Notes and 2025 Senior Unsecured Notes, together with cash on hand, to repurchase our outstanding 2019 First Lien Notes, 2020 First Lien Notes and 2021 First Lien Notes during the third quarter of 2014. We recorded approximately $42 million in deferred financing costs and approximately $340 million in debt extinguishment costs during the third quarter of 2014 related to the repayment of our 2019 First Lien Notes, 2020 First Lien Notes and 2021 First Lien Notes. 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)
| 2015 |  | 2014 |  | 2015 |  | 2014
2018 First Lien Term Loans | $ | — |  |  | $ | 1,597 |  |  | — | % |  | 4.3 | %
2019 First Lien Term Loan | 808 |  |  | 816 |  |  | 4.4 |  |  | 4.4 |
2020 First Lien Term Loan | 382 |  |  | 386 |  |  | 4.3 |  |  | 4.3 |
2022 First Lien Term Loan | 1,584 |  |  | — |  |  | 3.7 |  |  | — |
2023 First Lien Term Loan | 544 |  |  | — |  |  | 4.5 |  |  | — |
Total First Lien Term Loans | $ | 3,318 |  |  | $ | 2,799 |  |  |  |  |
____________
(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 an applicable margin of 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 2019 First Lien Term Loan and 2020 First Lien Term Loan carries substantially the same terms as the 2018 First Lien Term Loans and matures on October 9, 2019 and October 31, 2020, respectively. On May 28, 2015, we entered into our $1.6 billion 2022 First Lien Term Loan. We used the net proceeds received, together with operating cash on hand, to repay the 2018 First Lien Term Loans. The 2022 First Lien Term Loan matures on May 27, 2022 and bears interest, at our option, at either (i) the base rate, equal to the highest of (a) the Federal Funds effective rate plus 0.5% per annum, (b) the Prime Rate or (c) the Eurodollar rate for a one month interest period plus 1.0% (in each case, as such terms are defined in the 2022 First Lien Term Loan credit agreement), plus an applicable margin of 1.75%, or (ii) LIBOR plus 2.75% per annum subject to a LIBOR floor of 0.75%. An aggregate amount equal to 0.25% of the aggregate principal amount of the 2022 First Lien Term Loan is payable at the end of each quarter commencing in September 2015. The 2022 First Lien Term Loan contains substantially similar covenants, qualifications, exceptions and limitations as the First Lien Term Loans and First Lien Notes. We accounted for this transaction as a debt modification rather than an extinguishment of debt and, accordingly, did not record any debt extinguishment costs associated with the repayment of our 2018 First Lien Term Loans. However, in accordance with the accounting guidance for debt modification and extinguishment, we recorded approximately $13 million in debt modification costs associated with issuance costs and approximately $6 million in deferred financing costs related to the 2022 First Lien Term Loan during the second quarter of 2015. On December 15, 2015, we entered into our $550 million 2023 First Lien Term Loan. We utilized $325 million of the proceeds received, together with cash on hand, to purchase Granite Ridge Energy Center. We intend to use the remaining proceeds to repay project and corporate debt and for general corporate purposes. The 2023 First Lien Term Loan matures on January 15, 2023 and carries substantially similar terms as the 2019 First Lien Term Loan and 2020 First Lien Term Loan. During the fourth quarter of 2015, we recorded approximately $12 million in deferred financing costs related to the issuance of our 2023 First Lien Term Loan. 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(2)
| 2015 |  | 2014 |  | 2015 |  | 2014
2022 First Lien Notes | $ | 746 |  |  | $ | 745 |  |  | 6.3 | % |  | 6.3 | %
2023 First Lien Notes(1) | 573 |  |  | 840 |  |  | 8.0 |  |  | 8.0 |
2024 First Lien Notes | 490 |  |  | 490 |  |  | 6.0 |  |  | 6.0 |
Total First Lien Notes | $ | 1,809 |  |  | $ | 2,075 |  |  |  |  |
____________
(1) | On February 3, 2015, we repurchased approximately $147 million of our 2023 First Lien Notes with the proceeds from our 2024 Senior Unsecured Notes, as described in further detail above. In December 2015, we used cash on hand to redeem 10% of the original aggregate principal amount of our 2023 First Lien Notes, plus accrued and unpaid interest. During the fourth quarter of 2015, we recorded approximately $7 million in debt extinguishment costs related to the partial repurchase of our 2023 First Lien Notes.
(2) | 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.
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)
| 2015 |  | 2014 |  | 2015 |  | 2014
Russell City due 2023 | $ | 534 |  |  | $ | 591 |  |  | 7.5 | % |  | 6.2 | %
Steamboat due 2019(2) | 454 |  |  | 407 |  |  | 6.7 |  |  | 6.9 |
OMEC due 2019 | 315 |  |  | 325 |  |  | 6.9 |  |  | 6.9 |
Los Esteros due 2023 | 249 |  |  | 275 |  |  | 2.9 |  |  | 3.1 |
Pasadena(3) | 107 |  |  | 122 |  |  | 8.9 |  |  | 8.9 |
Bethpage Energy Center 3 due 2020-2025(4) | 75 |  |  | 82 |  |  | 7.0 |  |  | 7.0 |
Other | 11 |  |  | 8 |  |  | — |  |  | — |
Total | $ | 1,745 |  |  | $ | 1,810 |  |  |  |  |
_____________
(1) | Our weighted average interest rate calculation includes the amortization of deferred financing costs and debt discount.
(2) | We refinanced and upsized our Steamboat project debt during the fourth quarter of 2015 which lowered the interest rate and extended the maturity to November 22, 2019.
(3) | Represents a failed sale-leaseback transaction that is accounted for as financing transaction under U.S. GAAP.
(4) | 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 Our CCFC Term Loans are summarized in the table below (in millions, except for interest rates):
| Outstanding at December 31, |  | Weighted Average Effective Interest Rates(1)
| 2015 |  | 2014 |  | 2015 |  | 2014
CCFC Term Loans | $ | 1,580 |  |  | $ | 1,596 |  |  | 3.4 | % |  | 3.4 | %
____________
(1) | Our weighted average interest rate calculation includes the amortization of deferred financing costs and debt discount.
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. 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. In February 2014, we executed an amendment to the credit agreement associated with the CCFC Term Loans, which allowed us to issue $425 million in incremental CCFC Term Loans to fund a portion of the purchase price paid in connection with the closing of our acquisition of Guadalupe Energy Center on February 26, 2014. Guadalupe Energy Center was purchased by Calpine Guadalupe GP, LLC, a wholly-owned subsidiary of CCFC. The incremental term loans carry substantially the same terms and conditions as the $300 million in aggregate principal amount of CCFC Term Loans issued in June 2013. The incremental term loans were offered to investors at an issue price equal to 98.75% of face value. The CCFC Term Loans are secured by certain real and personal property of CCFC consisting primarily of seven 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. 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, 2015 (in millions):
| Sale-Leaseback Transactions(1) |  | Capital Lease |  | Total
2016 | $ | 25 |  |  | $ | 42 |  |  | $ | 67 |
2017 | 17 |  |  | 41 |  |  | 58 |
2018 | 21 |  |  | 39 |  |  | 60 |
2019 | 21 |  |  | 22 |  |  | 43 |
2020 | 21 |  |  | 20 |  |  | 41 |
Thereafter | 63 |  |  | 137 |  |  | 200 |
Total minimum lease payments | 168 |  |  | 301 |  |  | 469 |
Less: Amount representing interest | 61 |  |  | 114 |  |  | 175 |
Present value of net minimum lease payments | $ | 107 |  |  | $ | 187 |  |  | $ | 294 |
____________
(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 36 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, 2015 and 2014, the asset balances for the leased assets totaled approximately $877 million and $933 million with accumulated amortization of $390 million and $395 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, 2015 and 2014 (in millions):
| 2015 |  | 2014
Corporate Revolving Facility | $ | 316 |  |  | $ | 223 |
CDHI | 241 |  |  | 214 |
Various project financing facilities | 198 |  |  | 207 |
Total | $ | 755 |  |  | $ | 644 |
On February 8, 2016, we amended our Corporate Revolving Facility, extending the maturity by two years to June 27, 2020, and increasing the capacity by an additional $178 million to $1,678 million through June 27, 2018, reverting back to $1,520 million through the maturity date. Further, we increased the letter of credit sublimit by $250 million to $1.0 billion and extended the maturity by two years to June 27, 2020. 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 is guaranteed and secured by certain of our current domestic subsidiaries 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 a $300 million letter of credit facility related to CDHI. During the first quarter of 2014, we amended our CDHI letter of credit facility to lower our fees and extend the maturity to January 2, 2018. Fair Value of Debt We record our debt instruments based on contractual terms, net of any applicable premium or discount. The following table details the fair values and carrying values of our debt instruments at December 31, 2015 and 2014 (in millions):
| 2015 |  | 2014
| Fair Value |  | Carrying Value |  | Fair Value |  | Carrying Value
Senior Unsecured Notes | $ | 3,063 |  |  | $ | 3,450 |  |  | $ | 2,832 |  |  | $ | 2,800 |
First Lien Term Loans | 3,197 |  |  | 3,318 |  |  | 2,769 |  |  | 2,799 |
First Lien Notes | 1,885 |  |  | 1,809 |  |  | 2,247 |  |  | 2,075 |
Project financing, notes payable and other(1) | 1,653 |  |  | 1,638 |  |  | 1,734 |  |  | 1,688 |
CCFC Term Loans | 1,494 |  |  | 1,580 |  |  | 1,540 |  |  | 1,596 |
Total | $ | 11,292 |  |  | $ | 11,795 |  |  | $ | 11,122 |  |  | $ | 10,958 |
____________
(1) | Excludes a lease that is accounted for as a failed sale-leaseback transaction under U.S. GAAP.
We measure the fair value of our Senior Unsecured Notes, First Lien Term Loans, First Lien Notes and CCFC Term Loans 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
- References No definition available. + 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 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