Independent power company Calpine Corp. raised nearly $2.6 billion Thursday from a sale of bonds and other debt, offering yields as high as 9% despite having been upgraded last week to investment-grade status by a major rating agency.
The San Jose-based company, which already had raised $3.5 billion from debt sales this year, boosted its offerings from an original $2 billion. It has said it will use proceeds to refinance bridge loans related to recent purchases, as well as for working capital and general corporate purposes.
The sale came nine days after Moody's Investors Service upgraded Calpine's senior debt one notch to Baa3, that agency's lowest investment grade, from Ba1.
That upgrade makes Calpine, which is in the "defensive" energy sector, stand out at a time the ailing U.S. economy, weakened further by the Sept. 11 attacks, is causing many companies' credit ratings to fall.
It also allowed investment-grade bond investors, as well as junk bond investors, to buy Calpine's bonds at a time most super-safe U.S. Treasuries yield less than 5%.
On Thursday, Calpine shares rose $1.11 to close at $27.70 on the New York Stock Exchange.