S&P ups GEO

Standard & Poor's said it raised its ratings on The GEO Group Inc.

The corporate credit rating was raised to BB- from B+, the agency said, noting that the ratings were removed from CreditWatch, where they were placed with positive implications May 31, following the company's announcement that it would offer 3 million shares of its common stock in an underwritten public offering, intending to use proceeds to pay down its term loan bank debt.

The outlook is stable.

S&P said that the rating upgrade follows GEO's improved operating performance, more favorable industry fundamentals and an improved capital structure following the reduction of $74.6 million in term loan debt, funded through proceeds obtained from the recently completed common stock offering.

The ratings reflect the company's narrow business focus, customer concentration and leveraged financial profile, the agency noted, stating that these factors are somewhat mitigated by GEO's strong market position in the highly regulated U.S. private correctional facility management industry and favorable demographic trends.

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