GEO Group to swap 6.5% exchangeable notes due 2026 for cash, stock

By Marisa Wong

Los Angeles, April 5 – GEO Group, Inc. has entered into private exchange agreements with some holders of GEO Corrections Holdings, Inc.’s 6.5% exchangeable senior notes due 2026, according to a press release.

The noteholders have agreed to exchange $177 million aggregate principal amount of the outstanding 6.5% exchangeable notes due 2026 for a current estimated valuation of $305 million.

The consideration will consist of cash and shares of GEO’s common stock issued at closing. The final exchange value and number of shares of common stock to be issued by GEO to the noteholders will be determined based upon a volume-weighted average price per share of common stock during an averaging period beginning Friday and lasting 20 trading days.

GEO expects to fund the cash portion for the exchanges, which totals $177 million, with the net proceeds from its Thursday-priced offering of senior secured notes due 2029 and senior unsecured notes due 2031 or, if necessary, cash on hand.

The 6.5% notes due 2026 to be exchanged represent about 77% of the outstanding principal amount, with $53 million aggregate principal amount remaining outstanding following the exchange.

GEO Group is a Boca Raton, Fla.-based diversified government service provider, specializing in design, financing, development and support services for secure facilities, processing centers and community reentry centers.

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