FINANCE: Calpine offers par buyback of 400 Million in bonds

#1

http://www.bloomberg.com/apps/news?pid= ... tUyE3UPrTk

Dec. 2 (Bloomberg) -- Calpine Corp., which raised $48 billion to build the largest network of power plants in the U.S., offered to buy back as much as $400 million of secured bonds to reduce debt two days after saying it may file for bankruptcy.

The debt repurchase will be funded by proceeds from the July sale of U.S. gas fields, Calpine said in a statement. A Delaware judge said on Nov. 22 that San Jose, California-based Calpine violated its agreements with bondholders and can't use proceeds from the asset sale to buy fuel for its generators.

Calpine, which has over $17 billion in debt, said it would pay investors par, or 100 cents on the dollar, for the bonds. Fitch Ratings yesterday said Calpine's secured bonds may be worth 100 cents on the dollar and its unsecured debt may be worth as little as 11 cents on the dollar.

---------------------------------------

The reason they are doing this is because they are scared of losing their market postion. Pay attention:

Why would they do this?

They have to buy their stock, and cash out the dividends they owe investors. This enables them to move the money they would be holding onto if they were going to file bankrupt. If they filed bankrupt at this time, they would have to go to court, againt the new strict Congressional Energy Act. This par (or dollar for dollar) buy-back may reduce their size, undoubtedly, but it is there only way to escape bankruptcy and forfeiture of the Market Based Rate Authority, which is the only strategy that allows them a strong position in the federal regulated energy market.

Their only other option is to dwindle, wither, and blink out of existence... at least this way they are still fighting for the image of a competent company.

What does this mean for me?

The market has become VERY prime for trading in the energy market, if you invest, or have a inclination to start. As many people will be moving their par buybacks out of the energy market into the electronics market or media for the holiday surge, so energy stock prices will drop sharply, and they surge forward in January. You stand to make a 15-85 % profit in the electronics and media sectors this december. But if you move profit flow into energy, you can make up to a 200-450% profit come spring, are almost guaranteed a 60% return on your investment with minimal strategy.

And when Calpine DOES fold (which they will after their new Dept of Energy scrutinies are in place), any energy company whose stock you hold will suddenly be available to fill the void Calpine leaves. the leverage is not balanced equally among regions, and I am forbidden to tell which regions should be isolated for optimum investments.

Commodities is a perfect place to draw resources, currently. This kind of fluctuation will cut down on fuel costs, and you can already see them dropping from the early birds and companies that have been making major movements. In the last week, the local avereage for gas went down from 2.35 to 2.03. The reason is thus: Less tension on the commodities eguals less cash at the pump. It has nothing to do with some factor like America just got a new shipment, and we were running dry, or something... Gas prices are driven by how much investors EXPECT to make, given the calculated risks they take.

Why should I do this?

Commodities movement will ensure more energy production,.. which increases your energy return. This kind of market anomaly is the only time it makes sense to "sell low", lose some money, and buy the seemingly most unreliable form of stock that everyone is moving out of, and do so counting on a solid return.

By as early as February, it will be a consideration to sell the energy stock, and drop it into commodity futures. The period of Ramadan in the Middle East is a continuous factor on oil in the month of February, and it always hits the futures market solidly, increasing any possible gain.

How do you know this?

it's like playing chess five moves ahead of the game on the board. When the opportunity for victory comes, you are set up to enjoy it. My contract is explicit that I can not develop a portfolio leveraged in the energy market, cause I could run it dry, what what I know... but I can offer pointers based on market leverages once they are made public.

What proof is there?

to give you an idea of the value of this: on Nov 23, our company returned $10 per share dividends to its holders per record of Dec 1. That means not only did we have yor stock grow. But, if you held 30 shares, of our stock, valued last at $43.39, we would cut you a check for 300 dollars, just as a way of saying thanks. Even if you just bought them yesterday, Your 30 shares of stock valued (at last) at $1,301.70 would have yielded almost an approximate 25% ont-time profit in ONE DAY and you could sell them today.

I could have made 4 thousand into 5 thousand yesterday. and you could have too. I'd be getting it this 1,000 dollar check coming Monday, and so would you. what about a million? you want a check for 250,000 a few weeks before christmas? it's possible...

As expected, even with such action our stock is going down as people run from the energy market, and they are selling low, which is why it is going down. Which is in turn, why we yield the return. And you can expect all the energy companies to start paying out dividends to people who hold their stock, which will cause your stock to increase, drop a little, and then skyrocket as people move out of electronics and media and back into energy and automotives. If you are in a position to flip the market on them (buying their low sells, and finding an easy way to saturate the energy sector to approach commodities trading), reap those benefits! As it was my company made bank off the dividends... and It ain't like power plants are disappearing anytime soon...

vertical,
raum

#2

Just so you know, Calpine stock dropped 25% to .29(99999) in the fifteen minutes it took me to write this.'

Currently, 94,569,400 shares of calpine stock have moved today, all flow back to the company.

We dropped $.18.
Crude Oil rose $.38
gold rose $1.61

The exodus from the energy market to other sectors is already happening...

and sorry, Bandyta, bad advice. Sirius seems to not have caught on like wildfire and is quickly being extinguished: -.62 earnings pershare for the current duration, more than -.10 for third quarter 2005, despite a growing customer subscription base. and why invest when there are no dividends for its holders anyways???. despite the (sarcasm) incredible initial movement Howard Stern's announcement provoked (end sarcasm), I think people sobered up, and that's why it is slowly dropping and has never breached its all time high of a whole nine-fiddy per share.... which is less than the current return on most stocks coming to solid bear.

Though b seemed to have some sight of the market, and probably out out before this point, hopefully. Cause that hype is over.

#3

Investing is so fascinating to me...Thanks for this information raum, it is appreciated...

Hot Stock = Video Game Makers...I read a portfolio the other day, and no stock came close to video game stock...The return percentage was incredible...Should I soon start investing, that's what I'll be investing in...

#4

point made,

you would have made 1.10, a 2.5%+ gain on any investment you made since my original posting. and its continuing up.