CoreCivic Announces Proposed $450 Million Senior Notes Offering
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Insights
CoreCivic's announcement to offer up to $450 million in senior notes due 2029 is a strategic financial maneuver aimed at restructuring the company's debt profile. By initiating a tender offer for the 2026 Notes, the company is seeking to manage its near-term liabilities and potentially reduce the interest burden. This debt refinancing could lead to a more favorable debt maturity schedule and potentially lower interest payments, improving CoreCivic's cash flow and financial stability.
Investors should note the implications of such debt issuance on the company's creditworthiness. The guarantee by CoreCivic’s subsidiaries could be seen as a positive signal, indicating a unified backing for the new obligations. However, the market's reception of the new notes and the success of the tender offer will be crucial in determining the immediate financial impact on the company's stock.
The role of Citizens JMP Securities, LLC as the left lead underwriter, along with other financial institutions as bookrunners and co-managers, suggests a robust underwriting process. The involvement of reputable underwriters may enhance investor confidence in the notes offering, potentially affecting the demand and pricing of the notes.
From a legal perspective, CoreCivic's use of a shelf registration statement for the offering of the senior notes expedites the process and demonstrates regulatory compliance with SEC requirements. The shelf registration allows the company to prepare the offering documents in advance and go to market quickly when conditions are favorable. This agility in accessing capital markets is essential for responding to fluctuating market conditions and optimizing the timing of debt issuance.
It is also important to highlight that the offering and the tender offer are subject to specific legal stipulations, such as the 'no assurance' disclosure, which indicates the inherent uncertainty in such financial transactions. Investors should be aware of the legal language used in these disclosures, as it underscores the risk factors associated with the securities offering and the tender offer.
Market conditions at the time of the offering will significantly influence the success of CoreCivic's notes issuance and tender offer. The interest rates for the new senior notes, in comparison to the 4.75% and 8.25% rates of the existing notes, will be a critical factor for investors. The current economic climate, characterized by interest rate trends and investor sentiment towards the corrections facility management industry, will play a pivotal role in the uptake of the new notes.
Furthermore, the decision to refinance existing debt through a tender offer indicates CoreCivic's proactive approach to capital management. The market's perception of this move could impact the company's stock, as it may be interpreted as a sign of financial health or distress, depending on the context of the broader economic environment and the company's performance.
BRENTWOOD, Tenn., March 04, 2024 (GLOBE NEWSWIRE) -- CoreCivic, Inc. (NYSE: CXW) (“CoreCivic”) announced today that it intends to offer, subject to market and other conditions, up to
CoreCivic intends to use the net proceeds of this offering, together with borrowings under CoreCivic’s revolving credit facility and cash on hand, to fund the concurrent cash tender offer for any and all of the
Citizens JMP Securities, LLC is acting as left lead underwriter, StoneX Financial Inc. and FHN Financial Securities Corp. are acting as joint bookrunners, and Wedbush Securities Inc. and TCBI Securities, Inc. are acting as co-managers for the offering.
The Notes are being offered pursuant to CoreCivic’s shelf registration statement on Form S-3, which became effective upon filing with the Securities and Exchange Commission (the “SEC”) on March 4, 2024. The offering of the Notes is being made solely by means of a prospectus supplement and an accompanying prospectus. The preliminary prospectus supplement and accompanying prospectus relating to, and describing the terms of, the offering of the Notes will be filed with the SEC and will be available on the SEC’s website at www.sec.gov. When available, copies of the preliminary prospectus supplement and accompanying prospectus may be obtained from Citizens JMP Securities, LLC, Attn: Prospectus Department, or by telephone at (617) 725-5783.
This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, including the Notes or the 2026 Notes, nor shall it constitute a notice of redemption under the indenture governing the 2026 Notes, nor shall there be any offer, solicitation or sale of the Notes, the 2026 Notes or any other securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.
About CoreCivic
CoreCivic is a diversified, government-solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. CoreCivic provides a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. CoreCivic is the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and one of the largest prison operators in the United States. CoreCivic has been a flexible and dependable partner for government for 40 years. CoreCivic’s employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good. Learn more at www.corecivic.com.
Cautionary Note Regarding Forward-Looking Statements
This press release includes forward-looking statements concerning CoreCivic’s intention to issue the Notes, CoreCivic’s expectation of the aggregate principal amount of the Notes to be sold and its intended use of the net proceeds from the issuance of the Notes. These forward-looking statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Such forward-looking statements may be affected by risks and uncertainties in the Company’s business and market conditions. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. Important factors that could cause actual results to differ are described in the filings made from time to time by CoreCivic with the SEC and include the risk factors described in CoreCivic’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 20, 2024, as well as the risks identified in the preliminary prospectus supplement relating to the offering of the Notes under the heading “Risk Factors.” Except as required by applicable law, CoreCivic undertakes no obligation to update forward-looking statements made by it to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events.
| Contact: | Investors: Mike Grant - Managing Director, Investor Relations - (615) 263-6957 |
| Financial Media: David Gutierrez, Dresner Corporate Services - (312) 780-7204 |
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