The GEO Group, Inc. Announces Offering of Exchangeable Senior Notes Due 2026 by Its Subsidiary, GEO Corrections Holdings, Inc.

Rhea-AI Summary

The GEO Group, Inc. (NYSE: GEO) announced its subsidiary, GEO Corrections Holdings, Inc., plans to offer $200 million in exchangeable senior unsecured notes due 2026. An additional $30 million may be offered to cover over-allotments. The notes will be guaranteed by GEO and its domestic subsidiaries. Proceeds will be used to repurchase its 5.875% senior unsecured notes due 2022, cover transaction fees, and for general corporate purposes. The offering is limited to qualified institutional buyers and has not been registered under the Securities Act.

Positive

• Plans to use proceeds to repurchase higher interest senior unsecured notes, potentially leading to lower debt service costs.
• Offering additional notes may allow for greater flexibility in financial management.

Negative

• Offering of notes may indicate existing financial strain, leading to higher debt levels.
• Forward-looking statements caution that the offering may not be successfully completed.

The GEO Group, Inc. (NYSE: GEO) (“GEO”) announced today that its subsidiary, GEO Corrections Holdings, Inc. (“GEOCH”), intends, subject to market and other customary conditions, to offer $200,000,000 aggregate principal amount of exchangeable senior unsecured notes due 2026 (the “notes”) in a private offering. GEOCH also expects to grant the initial purchasers of the notes a 13-day option to purchase up to an additional $30,000,000 aggregate principal amount of the notes solely to cover over-allotments, if any. The notes will be guaranteed by GEO and GEO's domestic subsidiaries that are guarantors under its senior credit facility and outstanding senior notes. GEO intends to use the net proceeds to fund the repurchase, redemption or other discharge of its 5.875% senior unsecured notes due 2022, to pay related transaction fees and expenses, and for general corporate purposes.

The notes will be offered in the United States only to persons reasonably believed to be “qualified institutional buyers” pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act. The notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

This press release includes forward-looking statements regarding GEOCH's intention to issue the notes and its intended use of the net proceeds. These forward-looking statements may be affected by risks and uncertainties in GEO's business and market conditions. This information is qualified in its entirety by cautionary statements and risk factor disclosure contained in GEO's Securities and Exchange Commission filings, including GEO's reports on Form 10-K and Form 10-Q filed with the Commission. GEO wishes to caution readers that certain important factors may have affected and could in the future affect GEO's actual results and could cause GEO's actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of GEO, including the risks that the offering of the notes cannot be successfully completed or that the repurchase, redemption or other discharge of its 5.875% senior unsecured notes due 2022 cannot be successfully completed. GEO undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210217005967/en/

FAQ

What is GEO Group planning to do with the $200 million offering?

GEO Group intends to use the proceeds to repurchase its 5.875% senior unsecured notes due 2022 and for general corporate purposes.

What are the terms of GEO Group's exchangeable senior unsecured notes?

GEO's notes are due in 2026, with an option for an additional $30 million to cover over-allotments.

Who can purchase GEO Group's new notes?

The notes are offered only to 'qualified institutional buyers' in the U.S. and to non-U.S. persons outside the U.S.

What risks are associated with GEO Group's exchangeable senior unsecured notes?

Risks include the possibility that the offering may not be completed or the intended repurchase of senior notes may not occur.