Calpine Closes New $5 Billion DIP Financing

    New Facility Refinances Existing Debt, Provides Additional Working
    Lowers Interest Costs and Provides Greater Operational Flexibility

    SAN JOSE, Calif., March 29 /CNW/ -- Calpine Corporation (OTC Pink Sheets:  
CPNLQ) announced today that it has received funding for its new $5 billion
debtor-in-possession credit facility (DIP Facility) that will be used to
refinance the company's existing $2 billion DIP facility and repay
approximately $2.5 billion of secured debt at Calpine Generating Company, LLC,
one of Calpine's largest operating subsidiaries.  Remaining funds will be used
for working capital and other general corporate purposes, including repayment
of debt.
    Major benefits of the DIP Facility include the ability to provide liens
to counterparties to enhance Calpine's hedging program, which reduces cash
collateral and improves the company's ability to stabilize future cash flow; a
$2 billion expansion option to refinance existing project level debt; lower
annual interest costs; and a rollover option that allows Calpine to put in
place attractive exit financing as the company emerges from its Chapter 11
    Robert P. May, Calpine's Chief Executive Officer, stated, "Completion of
this refinancing is a true milestone for Calpine that puts us on stronger
financial footing to complete our restructuring.  The refinancing will help us
to emerge from Chapter 11 as a profitable and competitive power company
positioned for future growth.  The speed and efficiency with which we have
completed this refinancing is a testament to the hard work of everyone
involved, including our stakeholders.
    "The refinancing provides Calpine with significant near-term and
long-term benefits.  This new facility will lower annual interest cost by
approximately $100 million, simplify our capital structure and provide the
financial and operational flexibility to enhance the efficiencies and
operations of our plants.  Furthermore, the option to expand the DIP Facility
provides us with additional opportunities to repay other project debt and
realize further interest savings and operational enhancements," added May.
    Credit Suisse Securities (USA) LLC, Goldman Sachs Credit Partners L.P.,
JPMorgan Securities Inc. and Deutsche Bank Securities Inc., were collectively
lead arrangers for Calpine's DIP Facility, which consists of a:

    -- $4 billion Senior Secured Term Loan, priced at LIBOR plus 225 basis
       points; and a
    -- $1 billion Senior Secured Revolving Credit Facility, priced at LIBOR
       plus 225 basis points.

    The DIP Facility will remain in place until the earlier of an effective
Plan of Reorganization or the second anniversary of the closing date of the
DIP Facility.  If the DIP Facility is converted to an exit financing, the
final maturity will be seven years from the closing date of the DIP Facility.
The DIP Facility will be secured by substantially all of the assets which
secure the existing $2 billion DIP facility, liens on all of Calpine's
unencumbered assets, and junior liens on all encumbered assets of Calpine and
its debtor subsidiaries.

    Calpine Corporation is helping meet the needs of an economy that demands
more and cleaner sources of electricity. Founded in 1984, Calpine is a major
U.S. power company, capable of delivering nearly 25,000 megawatts of clean,
cost-effective, reliable and fuel-efficient electricity to customers and
communities in 18 states in the U.S. The company owns, leases and operates
low-carbon, natural gas-fired and renewable geothermal power plants. Using
advanced technologies, Calpine generates electricity in a reliable and
environmentally responsible manner for the customers and communities it
serves. Please visit for more information.
    This news release discusses certain matters that may be considered
"forward-looking" statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, including statements regarding the intent, belief or
current expectations of Calpine Corporation and its subsidiaries ("the
Company") and its management and uses words such as "believe," "intend,"
"expect," "anticipate," "plan," "may," "will" and similar expressions to
identify forward-looking statements.  Such statements include, among others,
those concerning the Company's expected financial performance and strategic
and operational plans, as well as all assumptions, expectations, predictions,
intentions or beliefs about future events.  Readers are cautioned that any
such forward-looking statements are not guarantees of future performance and
that a number of risks and uncertainties could cause actual results to differ
materially from those anticipated in the forward-looking statements.  Such
risks and uncertainties include, but are not limited to:  (i) the risks and
uncertainties associated with the Company's Chapter 11 cases and Companies'
Creditors Arrangement Act proceedings, including impact on operations; (ii)
the Company's ability to attract, retain and motivate key employees and
successfully implement new strategies; (iii) the Company's ability to
successfully reorganize and emerge from Chapter 11; (iv) the Company's ability
to attract and retain customers and counterparties; (v) the Company's ability
to implement its business plan; (vi) financial results that may be volatile
and may not reflect historical trends; (vii) the Company's ability to manage
liquidity needs and comply with financing obligations; (viii) the direct or
indirect effects on the Company's business of its impaired credit including
increased cash collateral requirements; (ix) the expiration or termination of
the Company's power purchase agreements and the related results on revenues; (*)
potential volatility in earnings and requirements for cash collateral
associated with the use of commodity contracts; (xi) price and supply of
natural gas; (xii) risks associated with power project development,
acquisition and construction activities; (xiii) risks associated with the
operation of power plants, including unscheduled outages of operating plants;
(xiv) factors that impact the output of the Company's geothermal resources and
generation facilities, including unusual or unexpected steam field well and
pipeline maintenance and variables associated with the waste water injection
projects that supply added water to the steam reservoir; (xv) quarterly and
seasonal fluctuations of the Company's results; (xvi) competition; (xvii)
risks associated with marketing and selling power from plants in the evolving
energy markets; (xviii) present and possible future claims, litigation and
enforcement actions; (xix) effects of the application of laws or regulations,
including changes in laws or regulations or the interpretation thereof; and
(xx) other risks identified in its Annual Report on Form 10-K for the year
ended December 31, 2006, which can be found on the Company's website at All information set forth in this news release is as of
today's date, and the Company undertakes no duty to update this information.

For further information:

For further information: media, Mel Scott, +1-713-570-4553, or, or investors, Karen Bunton, +1-408-792-1121, or, both of Calpine Corporation Web Site:

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