Calpine Reaches Claims Settlement With Holders of Certain Defaulted Bonds

    Proposed Settlement Would Reduce More Than $12 Billion of Bankruptcy
    Against Calpine's Estate to a Single, $3.5 Billion Claim

    SAN JOSE, Calif., April 19 /CNW/ -- Calpine Corporation (OTC Pink Sheets:  
CPNLQ) today filed a report on Form 8-K with the Securities and Exchange
Commission regarding a preliminary settlement outline with an ad hoc committee
of bondholders related to claims asserted against Calpine on account of
asserted guarantees of certain defaulted ULC1 bonds. The settlement is subject
to definitive documentation and court and other approvals. A copy of the
preliminary settlement outline is attached to today's Form 8-K filing by
Calpine, the terms of which govern in all respects the description of the
settlement in this release.
    If approved and consummated, the settlement will eliminate more than $8
billion of claims, which represent one of the largest related groups of claims
filed in Calpine's U.S. bankruptcy case.  Under the proposed settlement, more
than $12 billion of claims will be replaced by a single nominal claim of
approximately $3.5 billion; however, the bondholders have agreed that their
actual recovery will be no greater than principal, accrued pre-petition and
post-petition interest at the contract rate, plus fees.  As part of the
settlement, it is anticipated that the indenture trustee for the bondholders
will assign to Calpine its claim relating to these bonds in the Canadian
insolvency proceedings of certain of Calpine's Canadian subsidiaries.  The
preliminary settlement also anticipates that certain actions will be taken by
certain of Calpine's Canadian subsidiaries that are applicants in the Canadian
insolvency proceedings; those subsidiaries have not yet agreed to take those
    Robert P. May, Calpine's Chief Executive Officer, stated, "We are pleased
to have resolved these matters on mutually agreeable terms and to have taken
another significant step forward in our restructuring efforts.  This is an
extremely creative resolution and I am grateful for the hard work of everyone
involved in achieving this mutually beneficial outcome.  If approved, the
settlement will reduce multiple bankruptcy claims relating to these bonds to a
single claim, will eliminate more than $8 billion of claims against Calpine's
bankruptcy estate, and will avoid potentially time-consuming and expensive
    Approximately $2 billion of the defaulted ULC1 bonds were issued in 2001
by Calpine Canada Energy Finance ULC, an indirect wholly-owned Canadian
subsidiary of Calpine, which is an applicant in the Canadian insolvency
proceedings of certain of Calpine's Canadian subsidiaries.  These ULC1 bond
obligations were guaranteed by Calpine.
    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, Katherine Potter, +1-408-792-1168, or, or Karen Bunton, +1-408-792-1121, or,
both of Calpine Corporation Web Site:

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