On June 21, 2005, Standard&Poor's Ratings Services assigned its 'CCC' rating to Calpine Corp.'s (B-/Negative/--) planned $650 million contingent convertible notes due 2015. Proceeds from the issue will be used to redeem in full its High Tides III preferred securities. The company will use the remaining net proceeds to repurchase a portion of the outstanding principal amount of its 8.5% senior unsecured notes due 2011. The outlook is negative. The San Jose, Calif.-based company, which develops, acquires, owns, and operates power generation facilities, has about $18 billion of total debt outstanding. The ratings on Calpine reflect the company's reliance on asset sales and contract monetizations to meet its interest payments and other fixed obligations in 2005 and 2006.
