NEW YORK, Sept. 18 /PRNewswire/ -- Caithness Coso Funding Corp. (the "Company") announced today that it is offering (the "Offer") to purchase for cash any and all of its outstanding $90,000,000 original principal amount of 6.263% Subordinated Secured Notes due 2014 (CUSIP Nos. 128017AK6 and U12295AD0) (the "2014 Notes") and its $375,000,000 original principal amount of 5.489% Senior Secured Bonds due 2019 (CUSIP Nos. 128017AG5 and U12295AC2) (the "2019 Bonds", and together with the 2014 Notes, the "Notes"), on the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement, dated September 18, 2007 and the accompanying Consent and Letter of Transmittal (together, the "Offer Documents"). The Company is also soliciting consents (the "Consent Solicitation") from holders of the Notes for (x) certain proposed amendments that would, among other things, eliminate substantially all of the restrictive covenants and certain events of default contained in the indentures under which the Notes were issued and (y) certain proposed waivers that would waive (i) the change of control offer provisions required in connection with a change of control and (ii) the notice provisions required in connection with an optional redemption by the Company to allow the Company the flexibility to promptly redeem any Notes that are not tendered by the Expiration Time (as defined below).
Adoption of the proposed amendments and the proposed waivers requires that holders of at least 51% of the aggregate outstanding principal amount of each of the 2014 Notes and the 2019 Bonds not owned by the Company or its affiliates shall have delivered valid consents (which have not been withdrawn), and the Company and the Trustee for the Notes shall have executed and delivered supplemental indentures setting forth the proposed amendments and proposed waivers to the indentures (the "Minimum Consent Condition").
As previously announced, pursuant to the terms of the Purchase and Sale Agreement, by and among Caithness Energy, L.L.C. ("Caithness Energy"), certain owners of Caithness Energy, certain subsidiaries of Caithness Energy and ArcLight Renewco Holdings, LLC ("Renewco"), each dated July 9, 2007 (the "Purchase Agreement"), Renewco has agreed to acquire (the "Acquisitions") a one hundred percent (100%) direct ownership interest in (i) Coso Finance Partners, a California general partnership ("Navy I Partnership"), (ii) Coso Energy Developers, a California General Partnership ("BLM Partnership"), (iii) Coso Power Developers, a California General Partnership ("Navy II Partnership"), (iv) Coso Land Company, a California general partnership, (v) China Lake Joint Venture, a California general partnership, (vi) New CLPSI Company, LLC, a Delaware limited liability company, (vii) New RVPI Company, LLC, a Delaware limited liability company and (viii) Coso Hay Ranch, LLC, a Delaware limited liability company. Renewco will also acquire a one hundred percent (100%) indirect ownership interest in the Company and Coso Transmission Line Partners, a California general partnership.
The Consent Solicitation will expire at 5:00 p.m., New York City time, on October 1, 2007, unless earlier terminated or extended (such date and time, as the same may be modified, the "Consent Time"). The Offer will expire at 12:00 midnight, New York City time, on October 16, 2007, unless earlier terminated or extended (such date and time, as the same may be modified, the "Expiration Time").
The total consideration to be paid for each $1,000 in principal amount of Notes validly tendered and accepted for purchase, subject to the terms and conditions of the Offer Documents, will be paid in cash and will be calculated based on the 4.75% U.S. Treasury Note due March 31, 2011 and on the 3.875% U.S. Treasury Note due February 15, 2013, for the 2014 Notes and the 2019 Bonds, respectively, plus 50 basis points (the "Fixed Spread") (such price being rounded to the nearest cent), minus accrued and unpaid interest to, but not including, the applicable Settlement Date multiplied by a scaling factor that reflects the fact that the Notes are subject to principal amortization. The total consideration includes a consent payment equal to $20 per $1,000 in principal amount of Notes (the "Consent Payment"). Holders will only be eligible to receive the Consent Payment if they validly tender (and do not validly withdraw) their Notes at or prior to the Consent Time. The detailed methodology for calculating the total consideration for the Notes is outlined in the Offer Documents.
Holders who validly tender and do not properly withdraw their Notes at or prior to the Consent Time will be eligible to receive the total consideration, multiplied by the applicable scaling factor. Holders who validly tender and do not properly withdraw their Notes after the Consent Time, but at or prior to the Expiration Time, will be eligible to receive the total consideration less the Consent Payment, multiplied by the applicable scaling factor. In either case, all Holders who validly tender and do not properly withdraw their Notes will receive accrued and unpaid interest up to, but not including, the applicable settlement date.
Provided that the conditions to the Offer have been satisfied or waived, payment for Notes purchased in the Offer and Consents delivered in the Consent Solicitation shall be made on either the initial settlement date, which is expected to be promptly following the date on which the conditions to the Tender Offer are satisfied, unless the Company, in its sole discretion, extends or forgoes the initial settlement date for Notes that are validly tendered and not withdrawn at or prior the Consent Time or the final settlement date, which is expected to be promptly following the Expiration Time for Notes that are validly tendered after the Consent Time, but at or prior to the Expiration Time and not properly withdrawn.
Holders who tender their Notes must consent to the proposed amendments and waivers. Tendered Notes may be withdrawn and the related consents may be revoked at any time at or prior to 5:00 p.m. New York City time, on October 1, 2007 (the "Withdrawal Deadline"), but not thereafter.
The Company's Offer and Consent Solicitation are conditioned on, among other things, the following:
-- the closing of the Acquisitions shall have occurred; -- Renewco and its direct and indirect subsidiaries, shall have received proceeds from senior debt financing and lease financing all on terms acceptable to Renewco in its sole discretion, which in the aggregate, together with equity contributions from Renewco, is expected to be sufficient to fund consummation of the Acquisitions and the payment of all amounts in connection with the Offer and Consent Solicitation; and -- the satisfaction of the Minimum Consent Condition.
The Company has retained Citi to act as sole Dealer Manager for the Offer and as the Solicitation Agent for the Consent Solicitation. Citi can be contacted at (212) 723-6106 (collect) or at (800) 558-3745 (toll free). Global Bondholder Services Corporation is the Information Agent and Depositary for the Offer and can be contacted at (212) 430-3774 (collect) or at (866) 470-4200 (toll free). Copies of the Offer Documents and other related documents may be obtained from the Information Agent.
The Offer to Purchase and Consent Solicitation are being made solely on the terms and conditions set forth in the Offer Documents. Under no circumstances shall this press release constitute an offer to buy or the solicitation of an offer to sell any securities of the Company. This press release also is not a solicitation of consents to the proposed amendments and waivers to the indentures. The Offer and Consent Solicitation are not being made to holders of Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.
None of the Company, Renewco, the Dealer Manager, the Information Agent or the Depositary makes any recommendation as to whether holders of the Notes should tender their Notes or consent to the proposed amendments and waivers to the indentures and no one has been authorized by any of them to make such recommendations. Holders must make their own decisions as to whether to consent to the proposed amendments and waivers to the indentures and to tender the Notes.
Caithness Coso Funding Corp.
Caithness Coso Funding Corp. is a single-purpose Delaware corporation formed to finance the business and operations of Navy I Partnership, BLM Partnership, and Navy II Partnership, collectively, the "Partnerships." The Company has no material assets, other than the loans it has made and will make to the Partnerships and certain accounts created in connection with the offering of the Notes, and does not conduct any business, other than issuing the Notes and making the loans to the Partnerships, and activities directly related thereto.
Forward-Looking Statements
This press release contains forward-looking statements based on current Company management expectations. Those forward-looking statements include all statements other than those made solely with respect to historical fact. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those expressed in any forward-looking statements. These factors include, but are not limited to: (1) risks relating to the uncertainties in the California energy market, (2) the financial viability of Southern California Edison, (3) risks related to the operation of geothermal power plants, (4) the impact of avoided cost pricing along with other pricing variables, (5) general operating risks, including resource availability and regulatory oversight, (6) changes in government regulation, (7) the effects of competition, (8) consummation of the Offer, the Consent Solicitation and the Acquisitions, (9) the occurrence of any event, change or other circumstance that could give rise to the termination of the Purchase Agreement, which sets forth the terms of the Acquisitions, (10) the outcome of any legal proceedings that may be instituted against the Company and others relating to the Purchase Agreement, (11) the inability to complete the proposed Acquisitions due to the failure to obtain certain governmental approvals or the failure to satisfy other conditions to consummate the proposed Acquisitions, the Offer or the Consent Solicitation, (12) risks that the proposed Acquisitions disrupt current plans and operations and the potential difficulties in employee retention as a result of the proposed Acquisitions, and (13) the amount of the costs, fees, expenses and charges related to the proposed Acquisitions. Many of the factors that will determine the outcome of the subject matter of this press release are beyond the Company's ability to control or predict. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.
