S&P assigns BB, B to GEO notes

S&P said it assigned preliminary BB issue-level and preliminary 1 recovery ratings to GEO Group Inc. and GEO Corrections Holdings Inc.'s planned $700 million first-lien senior secured notes due 2029. Additionally, it gave preliminary B issue-level and 5 recovery ratings to the company's planned $500 million senior unsecured notes due 2031.

The 1 recovery rating reflects very high (90%-100%; 95% rounded estimate) recovery in default. The 5 recovery rating reflects modest (10%-30%; rounded estimate: 20%) recovery in default. The proposed notes are part of a $1.6 billion debt-financing package to fully refinance the company's debt capital structure.

“All other ratings, including the B issuer credit rating, remain on CreditWatch, where we placed them on April 1, 2024. If the transaction closes as presented to us, we expect to raise our issuer credit rating on GEO to B+ with a stable outlook and to finalize all our preliminary issue-level ratings on the proposed debt. This is because we believe a successful refinancing would signal the company's improved standing in credit markets and sufficient lender demand for GEO's debt, minimizing future refinancing risk,” S&P said in a press release.

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