What a difference a boom makes.

On Tuesday, power producer Calpine Corp., one of the biggest borrowers in the junk-bond market over the past few years, canceled $2.3 billion of term loans and secured notes, citing market conditions, according to company executives.

To be sure, the phrase “market conditions” often is used as a euphemism for resistance from investors who already hold a lot of Calpine paper.

The planned underwriting was crucial to refinancing existing debt that matures in November 2004. “The company is evaluating different financing alternatives and remains confident that it will be able to refinance this indebtedness prior to its maturity,” said a Calpine spokesperson.

The company’s stock fell about 9 percent on the news. “People are viewing it as a very lower-tier company with plenty of paper,” Tom Parker, high-yield portfolio manager for Barclays Global Investors, told Reuters. “The market’s just not really looking for more exposure to problem companies.”

Reuters said last week that Calpine was having trouble marketing the $1.05 billion junk-bond slice of the refinancing because many investors are already loaded up with Calpine paper. The company reportedly has about $17 billion in debt. The canceled offering was rated B-minus by Standard & Poor’s.

Last year, junk bonds jumped by double-digit rates, in large part because of the recovering economy and a surge in cash from mutual funds. But so far this year junk bond mutual funds have experienced a net outflow of about $431 million.

Calpine had planned to pay yields of 11.25 percent on a $525 million portion of fixed-rate notes, according to Reuters. The offering was also expected to include $525 million of floating rate notes and a $1.3 billion term loan.

What are Calpine’s alternatives now? The power producer can come back to the market and try again; it can go to the private placement market; or it can see whether it can peddle debt to a group of banks.