Moody’s upgrades GEO Group

Moody's Investors Service said it upgraded GEO Group, Inc.'s senior unsecured rating to Ba3 from B1 and senior secured credit facility to Ba2 from Ba3.

The agency also affirmed GEO Group's corporate family at Ba3 as the preponderance of the REIT's debt is currently unsecured debt.

The outlook is stable.

Moody’s said the action reflects GEO's sound operational performance, continued improvement in operating margins, ample liquidity position, and high fixed charge coverage at 2.5 times as of the second quarter of 2014. While the REIT's core business is highly vulnerable to government budgetary restraints, the agency believes GEO's operating platform is diverse enough to absorb periods of modest deterioration in earnings without too much strain on its current rating.

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