S&P cuts GEO Group

S&P said it cut the Geo Group Inc.’s issuer rating to CCC from CCC+, its senior secured credit facility rating to B- from B but affirmed the CCC rating on its unsecured debt and raised the recovery rating to 4 from 5.

“We expect GEO to engage in a distressed debt restructuring transaction before spring 2023. The company hired advisors in 2021 to explore capital structure alternatives considering its large $1.8 billion debt maturity wall in 2024 and its uncertain access to capital markets. In a January 2022 SEC filing, GEO disclosed the terms of comprehensive debt restructuring proposals made by the company and its lenders. While GEO has not yet agreed to terms with its lenders, we believe the discussions are ongoing and will likely result in a transaction before its nearest debt maturity in April 2023,” S&P said in a press release.

“We understand that neither the lenders nor GEO have proposed a subpar exchange; however the proposed transaction terms feature some elements that we deem distressed,” the agency added.

The outlook is negative.

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