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Corrections Corp. $695 million bank facility at L+250 bps for term A, revolver, L+300 bps for term B
By Sara Rosenberg
New York, April 11 - Corrections Corp. of America released details on the interest rates and tranches of its new $695 million credit facility in a Securities and Exchange Commission filing. Lehman Commercial Paper is the administrative agent and Lehman Brothers is the exclusive advisor, sole lead arranger and sole bookrunner for the loan.
The new loan, according to the filing, will consist of a $75 million four-year revolver with an interest rate of Libor plus 250 basis points, a $125 million four-year term A with an interest rate of Libor plus 250 basis points and a $495 million six-year term B with an interest rate of Libor plus 300 basis points, which is subject to a two-year accelerated maturity if the company's existing 12% senior notes are not refinanced before Sept. 30, 2005. There is a 50 basis point commitment fee on the revolver, the filing said. Amortization of the term A is $25 million in the first year, $30 million in the second year and $35 million in both the third and fourth years.
Security for the loan is a first priority interest in the company's and its subsidiaries assets along with capital stock of the domestic subsidiaries and 65% of capital stock from foreign subsidiaries.
Proceeds from the term tranches, combined with proceeds from a $150 million proposed senior note offering, will be used to refinance the existing credit facility, which has $789.7 million outstanding and matures on Dec. 31, 2002. The revolver will be used for general corporate purposes, the filing said.
Refinancing is expected to be completed by May 15, according to the filing.
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