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UNITED
STATES
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SECURITIES
AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
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FORM
8-K
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CURRENT
REPORT
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Pursuant
to Section 13 or 15(d) of
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the
Securities Exchange Act of 1934
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Date
of Report (Date of earliest event reported): February 22,
2010
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CLECO
CORPORATION
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(Exact
name of registrant as specified in its
charter)
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Louisiana
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1-15759
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72-1445282
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(State
or other jurisdiction
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(Commission
File Number)
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(IRS
Employer
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of
incorporation)
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Identification
No.)
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2030
Donahue Ferry Road
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Pineville,
Louisiana
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71360-5226
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (318)
484-7400
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Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
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o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.02 Termination
of a Material Definitive Agreement
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On February 22, 2010, Cleco Evangeline LLC
(“Evangeline”), an indirect wholly owned subsidiary of Cleco Corporation
(“Cleco”), and J.P. Morgan Ventures Energy Corporation (“JPMVEC”) entered
into a Purchase, Sale and Restructuring Agreement (“Evangeline
Restructuring Agreement”) whereby the parties agreed to (i) terminate the
existing Capacity Sale and Tolling Agreement between the parties
(“Evangeline Tolling Agreement”) which was set to expire in 2020 and (ii)
enter into a new Capacity, Sale and Tolling Agreement effective March 1,
2010. The other significant terms of the Evangeline
Restructuring Agreement are:
§ The
new tolling agreement is an exclusive, market-based tolling agreement for
Evangeline’s generating Units 6 and 7, expiring on December 31,
2011,
with an option for JPMVEC to extend the
term of the agreement through December 31, 2012. The agreement
also gives Evangeline the right to
terminate its Unit 6 obligations prior
to the expiration of the term;
§ $126.6
million of Evangeline’s 8.82% Senior Secured Bonds due 2019 (the
“Evangeline Bonds”) owned by JPMVEC were transferred to
Evangeline
and subsequently retired by Evangeline;
and $5.3 million of accrued interest associated with the Evangeline Bonds
transferred to Evangeline was
eliminated;
§ JPMVEC
paid Evangeline $56.7 million; and
§ JPMVEC
returned Cleco’s $15.0 million letter of credit issued under the
Evangeline Tolling Agreement and the letter of credit was
terminated.
The termination of the Evangeline Tolling Agreement
was considered a termination of an operating lease and a triggering event
requiring an asset impairment analysis. The $56.7 million cash
payment from JPMVEC was treated as partially a settlement of the $26.9
million operating lease asset that represented the straight line
recognition of a fixed escalation. Management is currently
evaluating the asset impairment analysis on Evangeline’s assets which as
of January 31, 2010 had a carrying value of $182.8 million.
In accordance with the terms of the Evangeline
Restructuring Agreement, Evangeline issued an irrevocable redemption
notice to call the remaining $35.2 million of outstanding Evangeline
Bonds, and to pay the debt holders $1.5 million of accrued interest and
approximately a $10.0 million make-whole payment at the redemption
date. As a result of the debt retirement, Evangeline will
expense $2.2 million in unamortized debt issuance costs associated with
the Evangeline Bonds. The Evangeline Bonds were non-recourse to
Cleco and redemption of the Evangeline Bonds is permitted under Cleco’s
revolving credit facility. Upon the redemption of the remaining
Evangeline Bonds $30.1 million of restricted cash will be released to
Evangeline.
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CLECO
CORPORATION
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Date: February
22, 2010
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By: /s/ R. Russell
Davis
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R.
Russell Davis
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Vice
President, Investor Relations
&
Chief Accounting Officer
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