GEO Group amends loan, modifying leverage covenants

By Sara Rosenberg

New York, Sept. 2 - GEO Group Inc. amended its senior secured credit facility, revising the total leverage ratio (see table 1) and senior secured leverage ratio (see table 2), according to an 8-K filed with the Securities and Exchange Commission Tuesday.

In addition, the amendment added a new interest coverage ratio of 3.00 to 1.00 and eliminated the fixed charge coverage ratio.

Furthermore, the capital expenditure limits were changed to $200 million for fiscal 2008, $275 million for fiscal 2010 and $50 million each fiscal year thereafter.

The amendment also changed the accordion feature to $150 million available under the revolver or term loan on or prior to Dec. 31 and an additional $150 million available after Dec. 31. Previously, the accordion allowed for $150 million of incremental borrowings, of which only $75 million could be added to the revolver.

The amendment was completed on Aug. 26.

BNP Paribas is the administrative agent on the deal.

GEO is a Boca Raton. Fla.-based provider of government-outsourced services in the management of correctional, detention, and mental health and residential treatment facilities.

Table 1: Amended Leverage Ratio

Period Total Leverage Ratio

Through the penultimate day of fiscal 2009 4.50 to 1.00

Last day of fiscal 2009 through penultimate day of fiscal 2010 4.25 to 1.00

Last day of fiscal 2010 through penultimate day of fiscal 2011 3.25 to 1.00

Thereafter 3.00 to 1.00

Table 2: Amended Senior Secured Leverage Ratio

Period Senior Secured Leverage Ratio

Through penultimate day of fiscal 2010 3.25 to 1.00

Last day of fiscal 2010 through the penultimate day of fiscal 2011 2.25 to 1.00

Thereafter 2.00 to 1.00

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