By Abigail W. Adams
Portland, Me., Feb. 19 – GEO Corrections Holdings Inc. priced $200 million of five-year notes exchangeable for the GEO Group Inc.’s shares after the market close on Thursday at par with a coupon of 6.5% and an initial exchange premium of 25%, according to a company news release.
Pricing came at the cheap end of talk for a coupon of 6% to 6.5% and at the rich end of talk for an initial exchange premium of 20% to 25%, according to a market source.
StoneX Group Inc. was the bookrunner for the Rule 144A offering, which carries a greenshoe of $30 million.
The notes are non-callable.
They are putable upon a fundamental change. The company will pay additional interest based on the dividend paid on its common stock.
Net proceeds are expected to be $192 million or will be $221.2 million if the greenshoe is exercised in full.
Proceeds will be used to repurchase or redeem the company’s 5 7/8% senior notes due 2022 and for general corporate purposes.
The GEO Group is a Boca Raton, Fla.-based correctional facilities-focused real estate investment trust.
| Issuer: | GEO Corrections Holdings Inc.
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| Exchange entity: | GEO Group Inc.
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| Securities: | Exchangeable notes
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| Amount: | $200 million
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| Greenshoe: | $30 million
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| Maturity: | Feb. 23, 2026
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| Bookrunner: | StoneX Group Inc.
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| Coupon: | 6.5%
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| Price: | Par
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| Yield: | 6.5%
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| Conversion premium: | 25%
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| Conversion price: | $9.225
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| Conversion rate: | 108.4011
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| Call options: | Non-callable
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| Put options: | Upon a fundamental change
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| Pricing date: | Feb. 19
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| Settlement date: | Feb. 24
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| Distribution: | Rule 144A
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| Talk: | Coupon of 6% to 6.5% and initial exchange premium of 20% to 25%
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| Stock symbol: | NYSE: GEO
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| Stock price: | $7.38 at market close Feb. 18
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| Market capitalization: | $895.25 million
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