Bear Stearns is exiting the energy marketing and trading joint venture CalBear Energy LP, which it launched with Calpine Corp. in September. The complexity of Calpine’s ongoing bankruptcy was blamed.

“While we have decided not to move forward with Calpine under this current agreement, we are in active discussions with them regarding alternative arrangements,” a Bear Stearns spokesman told Daily GPI. “In any event, Bear Stearns remains committed to the energy trading sector, and we intend to continue expanding our presence into the market.”

Spokesman Russell Sherman had no comment on the reasons for exiting CalBear nor on what Bear Stearns’ next move in the energy markets might be.

Calpine spokesman Katherine Potter said the company’s trading operation will not be affected by the Bear Stearns pullout from CalBear. The CalBear arrangement only handled short-term trades of 60 days or less and up to $350 million. Existing customer commitments will be fulfilled, she said. Support to Calpine collateral that came from CalBear will be offset by Calpine’s $2 billion worth of debtor-in-possession financing, Potter said.

Paul Posoli was the Calpine executive vice president named to head the CalBear venture. He left the company abruptly last month. “Calpine remains fully committed to its merchant services business and to CalBear Energy, our energy venture with Bear Stearns,” Calpine said in a statement at the time. Potter said that Posoli’s departure and the Bear Stearns pullout are unrelated.

CalBear was formed by Bear Stearns and Calpine in September 2005 (see Daily GPI, Sept. 9, 2005). At the time it was touted as a way for Calpine to bolster its credit rating. “About a year ago we realized the most efficient way to get a credit enhancement was to team up with a financial institution,” Posoli said at the time, alluding to Calpine’s $16 billion in debt. “The past year we have been working with Bear Stearns on this structure.”

Calpine filed for bankruptcy in December (see Daily GPI, Dec. 1, 2005).

©Copyright 2006Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.