S&P slices GEO group

S&P said it dropped the GEO Group Inc.’s issuer rating to SD from CC and its senior secured debt and senior unsecured debt to D from CC and C, respectively.

“The downgrade follows the completion of GEO's distressed debt exchange with its creditors. The transaction involved the company's par exchange of significant exposure under the existing debt for longer-dated secured credit facilities featuring higher interest rates. GEO exchanged the vast majority of its revolver and term loan obligations for new facilities maturing in 2027 and most of its unsecured notes obligations for new tranches maturing in 2028,” S&P said in a press release.

The agency said it considers the exchange to be the equivalent of a default because the creditors received less value than they were originally promised.

“Over the coming days, we plan to raise our issuer credit rating on GEO to B because the transaction has significantly reduced its near-term debt burden and vastly improved its liquidity position and financial flexibility,” S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.