S&P rates GEO notes B+

Standard & Poor's said it assigned a B+ senior unsecured debt rating and 4 recovery rating to the GEO Group Inc.'s proposed $250 million senior unsecured notes due January 2022.

The 4 recovery rating indicates 30% to 50% expected default recovery for senior unsecured creditors.

The agency said it believes GEO will use the net proceeds to refinance its existing $250 million 7¾% senior unsecured notes due 2017, which become callable at par on Oct. 15.

All of the company's existing ratings, including the B+ corporate credit rating, remain unchanged.

The outlook is stable.

The ratings reflect the company's fair business risk profile and highly leveraged financial risk profile, S&P said.

The company benefits from high entry barriers in the private correctional industry, yet it remains vulnerable to the decision-making of a concentrated base of customers from various levels of the U.S. government, the agency said.

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