S&P rates GEO loans BB

S&P said it assigned preliminary BB issue-level and 1 recovery ratings to GEO Group Inc.’s planned term loan and upsized revolver. The 1 recovery rating indicates very high (90%-100%; rounded estimate: 95%) recovery in default.

Concurrently, the agency placed GEO’s ratings on CreditWatch with positive implications.

GEO plans to sell $1.6 billion of new debt, including a $400 million term loan, and refinance its debt.

“The positive CreditWatch placement reflects our belief that a successful refinancing of GEO's debt capital structure will address its debt maturity wall and reduce the risk of a distressed debt restructuring. Rising social pressures on the industry have narrowed the company's pool of investors in recent years, resulting in higher borrowing costs, a sharp reduction in revolving credit facility commitments, and a distressed debt restructuring in 2022,” S&P said in a press release.

The agency noted GEO lowered its S&P Global Ratings-adjusted net leverage to 3.5x in 2023, which is under the 5x upgrade threshold, primarily through cash flow generation and net debt reduction.

© 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.