Calpine, Goodrich Petroleum Sell Shares as U.S. Equities Surge

By Elizabeth Hester and Michael J. Moore

Sept. 23 (Bloomberg) -- Calpine Corp. and Goodrich Petroleum Corp. are among companies that announced the sale of as much as $1.83 billion in stock and convertible shares, taking advantage of nearly one-year highs in equities.

The Standard & Poor’s 500 Index has climbed 58 percent since it closed at a 12-year low on March 9. So far this year, 483 firms have raised $150.3 billion selling stock and convertible notes, according to data compiled by Bloomberg.

“The stock market has moved up significantly after a period where the window to raise capital for publicly traded companies has been slammed shut and nailed into the windowsill,” said James Ellman, president of San Francisco- based money manager Seacliff Capital LLC. “The window is open just a little bit right now, and there is a rush coming through that crack.”

Companies are taking advantage of rising stock markets to sell shares to the public after investors pulled back from all but the safest assets amid a global credit contraction. In the first quarter, only $13.8 billion was raised in stock and convertible sales, Bloomberg data show.

The four companies said as many as 99.5 million shares would be sold. Based on yesterday’s closing stock prices, that would be $912.3 million in stock. The firms also announced as much as $920 million in convertible bond sales.

Goodrich Petroleum, the oil and gas explorer with properties mostly in Louisiana and Texas, plans to sell $150 million in convertible senior notes, according to a company statement yesterday. JPMorgan Chase & Co. is leading the sale and has the option to sell $22.5 million in additional notes.

Calpine’s Sale

Calpine, the biggest U.S. producer of natural gas-fueled power, is selling 20 million shares on behalf of a Harbinger Capital Partners fund, the Houston-based company said yesterday. Calpine won’t receive any proceeds from the sale, which is being managed by Morgan Stanley.

Harbinger may sell an additional 3 million shares if demand warrants. Calpine closed at $12.35 yesterday on the New York Stock exchange, valuing the shares at $284 million.

Incyte Corp., the Wilmington, Delaware-based developer of medicines for diseases of the immune system, announced plans to sell as much as $287.5 million of convertible notes and 18 million shares.

Incyte shares rose 16 cents to $8.13 yesterday in Nasdaq trading. Selling the new shares, including an additional 2.7 million that underwriters have an option to buy, at that price would raise as much as $168.3 million. Goldman Sachs Group Inc. is managing the sale with Morgan Stanley and JPMorgan.

American Airlines

AMR Corp., the parent company of American Airlines, sold 48.5 million shares and $400 million of convertible notes due in 2014, using the proceeds for general corporate purposes. Citigroup Inc., Morgan Stanley and UBS AG managed the sale, Fort Worth, Texas-based AMR said in a statement. Underwriters can buy an extra 7.3 million shares and $60 million in notes.

AMR has more than tripled since it touched this year’s low of $2.40 on March 6. The shares fell 59 cents to $8.44 yesterday in New York trading.

“If the window remains open, this trickle will increase significantly,” Ellman said. “I wouldn’t say it will become a flood, but there will be a significant amount of capital raising as long as the market stays at approximately this level and as long as investors are willing to contemplate committing capital to new deals.”

To contact the reporters on this story: Elizabeth Hester in New York at ehester@bloomberg.net; Michael J. Moore in New York at mmoore55@bloomberg.net.