Moody’s lowers GEO, debt, facility

Moody's Investors Service said it downgraded GEO Group, Inc.’s corporate family rating to B1 from Ba3, senior unsecured rating to B1 from Ba3, senior secured credit facility to Ba3 from Ba2 and senior unsecured debt shelf to provisional B1 from provisional Ba3.

The outlook was revised to negative from stable.

The downgrades are a result of the Aug. 18 announcement by the U.S. Justice Department that it plans to phase out its use of privately operated prisons.

Moody’s said the actions and negative outlook reflects the substantial uncertainty regarding the ultimate effect that the Department of Justice’s announcement will have on the REIT's cash flows.

Moody's noted that as of Dec. 31, 2015, the Federal Bureau of Prisons represented approximately 14% of the entity's revenues. However, the steep decline in the REIT's stock price has closed this capital market access at least in the short-term.

Upward rating movement will be unlikely in the medium-term and will require more clarity on the full effect of this announcement to the REIT's cash flows, the agency added.

© 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.