GEO Group launches $200 million term loan B at discount of 99

By Sara Rosenberg

New York, June 23 - GEO Group Inc. launched its $200 million six-year term loan B on Wednesday with an original issue discount of 99, according to a market source.

As was previously reported, the term loan B is talked at Libor plus 325 basis points with a 1.5% Libor floor.

The company's $750 million credit facility also includes a $400 million five-year revolver and a $150 million five-year delayed-draw term loan A, with both of these tranches talked at Libor plus 275 bps.

Upfront fees on the revolver and the term loan A range from 37.5 bps to 62.5 bps based on commitment size.

BNP Paribas is the lead bank on the deal.

Proceeds will be used to refinance existing debt and to help fund the acquisition of Cornell Cos. Inc. at an estimated enterprise value of $685 million, including the assumption of $300 million of Cornell debt and excluding cash.

Cornell stockholders can choose to receive GEO common stock or cash. In order to preserve the tax-deferred treatment of the transaction, no more than 20% of the outstanding shares of Cornell common stock may be exchanged for cash.

The merger is expected to close in the third quarter.

Boca Raton, Fla.-based GEO Group and Houston-based Cornell are prison operators.

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