The Bank of New York has denied debt-ridden West Coast power giant Calpine access to proceeds of a $117 million asset sale after two large bondholders claimed the company is misusing the money.
Without the crucial cash, Calpine, which has floated $17 billion in junk bonds, may have difficulty meeting its massive debt obligations.
The cash was supposed to be reserved to purchase assets that can help Calpine grow its business.
But a portfolio manager told The Post that several of Calpine’s largest bondholders said the firm was using the money – from the sale of a natural gas field – to keep its power plants running.
BoNY acknowledged in a letter to bondholders – a copy of which a bondolder read to The Post – that it was holding back funds from Calpine but declined further comment.
One bondholder told the Post that Calpine had $395 million left in the BoNY account. He said that if the company was using this money to pay its fuel bills, it may not have the money to buy the new assets.