The GEO Group, Inc. (NYSE:GEO) (“GEO” or the “Company”)
today announced the final results of the previously announced
Exchange Offers and Consent Solicitations (each as defined below)
to exchange (the “Exchange Offers”) its outstanding (i) 5.125%
Senior Notes due 2023 (the “2023 Notes”) and (ii) 5.875% Senior
Notes due 2024 (the “2024 Notes” and, collectively with the 2023
Notes, the “Old Notes”) for newly issued 10.500% Senior Second Lien
Secured Notes maturing on June 30, 2028 (the “New Notes”) and, if
elected, cash, upon the terms and subject to the conditions set
forth in the Prospectus (as defined below). In connection with the
Exchange Offers, GEO also solicited consents to amend the
indentures governing the Old Notes (the “Consent
Solicitations”).
The Exchange Offers and Consent Solicitations expired at 5:00
p.m., New York City time, on August 16, 2022 (the “Expiration
Time”). According to information received by the Information Agent
and Exchange Agent, as of the Expiration Time, approximately $134
million principal amount of the 2023 Notes had been validly
tendered and an additional approximately $50 million principal
amount of the 2023 Notes had delivered consents, and approximately
$202 million principal amount of the 2024 Notes had been validly
tendered, representing aggregate support from approximately 71% of
the 2023 Notes and approximately 90% of the 2024 Notes. The
aggregate principal amount of each series of Old Notes that were
validly tendered and 2023 Notes Consents (as defined below) that
were validly delivered, in each case as of the Expiration Time, as
reported by the Information Agent and Exchange Agent, are specified
in the table below. The table below also sets forth the Exchange
Consideration that holders of the Old Notes will receive.
Title of Old Notes to be
Tendered
CUSIP Number
Outstanding Principal
Amount
Exchange Consideration
Amount Tendered for
Exchange
Amount of Delivered 2023 Notes
Consents
Outstanding Principal Amount
Tendered / Delivered Consent
Tender of Old Notes and
Delivery of Consent (per $1,000 of Old Notes
Tendered)(1)(2)
Delivery of Consent
Only(3)
5.125% Senior Notes due 2023
36159RAG8
$259,275,000
$133,541,000
$49,542,000
70.6%
At the election of the
holder:
$300.00 principal amount of New
Notes and $700.00 of cash
OR
$1,050.00 principal amount of New
Notes
(the “2023 Notes-Only
Consideration”)
$1.00 of cash per $1,000 of 2023
Notes represented by such Consent (the “2023 Notes Consent
Fee”)
5.875% Senior Notes due 2024
36162JAA4
$225,293,000
$202,040,000
N/A
89.7%
At the election of the
holder:
$750.00 principal amount of New
Notes and $250.00 of cash
OR
$1,030.00 principal amount of New
Notes
(the “2024 Notes-Only
Consideration”)
N/A (Holders of the 2024 Notes
may only tender their Consent by validly tendering (and not validly
withdrawing) their 2024 Notes)
(1)
Exchange Consideration per $1,000
principal amount of Old Notes validly tendered (and not validly
withdrawn) prior to the Expiration Time.
(2)
Excludes accrued and unpaid interest,
which will be paid in addition to the Exchange Consideration.
(3)
Holders of the 2023 Notes were permitted
to elect to either (i) tender their 2023 Notes and related Consent
(as defined below) or (ii) only deliver their Consent (the “2023
Notes Consent”). Holders of the 2024 Notes were only permitted to
tender their 2024 Notes with the related Consent.
Holders of approximately $87 million principal amount of the
2023 Notes selected the 2023 Notes-Only Consideration, and holders
of approximately $108 million principal amount of the 2024 Notes
selected the 2024 Notes-Only Consideration.
Based on the applicable total consideration and the amounts of
Old Notes tendered by the Expiration Time, approximately $287
million aggregate principal amount of New Notes will be issued. GEO
intends to accept for exchange all Old Notes validly tendered prior
to the Expiration Time and expects to settle each Exchange Offer
and Consent Solicitation on the settlement date, which is currently
expected to be August 19, 2022 (the “Settlement Date”).
In addition to the applicable Exchange Consideration (each as
described in the table above), eligible holders whose Old Notes are
exchanged in the Exchange Offers will receive accrued and unpaid
interest, if any, in cash in respect of all of their exchanged Old
Notes from the applicable last interest payment date to, but not
including, the Settlement Date.
In conjunction with the Exchange Offers, the Company also
solicited consents from holders of each series of Old Notes
(“Consents”) to certain proposed amendments to each indenture
governing the Old Notes (the “Old Notes Indentures”) to, among
other things, modify certain covenants and other provisions of the
indentures governing the Old Notes necessary or advisable to effect
the Exchange Offers and certain related refinancing transactions
described in this news release (the “Proposed Amendments”). Holders
of Old Notes that tendered such Old Notes will be deemed to have
given Consent to the Proposed Amendments with respect to the Old
Notes. The Company received Consents from holders representing a
majority of the outstanding principal amount of such series of Old
Notes (the “Old Notes Requisite Consents”) and a supplemental
indenture to the respective indenture, giving effect to the
Proposed Amendments with respect to the applicable Old Notes, is
expected to be executed at the Settlement Date.
The Exchange Offers and the Consent Solicitations represent part
of a comprehensive series of transactions the Company has proposed
to address its nearer-term debt maturities (the “Transactions”).
Other elements of the Transactions include the exchange of certain
revolving credit loans and term loans under the Company’s senior
secured credit facility for a combination of cash and new
commitments and loans under a new credit facility (the “Credit
Agreement Exchange”) and the exchange of approximately $239 million
of the Company’s 6.000% Senior Notes due 2026 for newly issued
9.500% Senior Second Lien Secured Notes due 2028, in a private
exchange (the “Private Exchange”). The Company expects to close all
of the Transactions on the Settlement Date, subject to customary
closing conditions.
The complete terms and conditions of the Exchange Offers and
Consent Solicitations are more fully described in Registration
Statement, including the prospectus forming part thereto, GEO filed
with the SEC on July 19, 2022, as amended on August 15, 2022 and
declared effective by the Securities and Exchange Commission on
August 16, 2022.
The Information Agent and Exchange Agent for the Exchange Offers
and Consent Solicitations is D.F. King & Co., Inc. and can be
contacted at (800) 290-6428 (for information U.S. Toll-free), (212)
269-5550 (information for brokers) or geo@dfking.com (email).
About The GEO Group
The GEO Group, Inc. (NYSE: GEO) is a leading diversified
government service provider, specializing in design, financing,
development, and support services for secure facilities, processing
centers, and community reentry centers in the United States,
Australia, South Africa, and the United Kingdom. GEO’s diversified
services include enhanced in-custody rehabilitation and
post-release support through the award-winning GEO Continuum of
Care®, secure transportation, electronic monitoring,
community-based programs, and correctional health and mental health
care. GEO’s worldwide operations include the ownership and/or
delivery of support services for 102 facilities totaling
approximately 82,000 beds, including idle facilities and projects
under development, with a workforce of up to approximately 18,000
employees.
Use of forward-looking statements
This news release may contain “forward-looking statements”
within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, and the U.S. Private Securities Litigation Reform
Act of 1995. Readers are cautioned not to place undue reliance on
these forward-looking statements and any such forward-looking
statements are qualified in their entirety by reference to the
following cautionary statements. All forward-looking statements
speak only as of the date of this news release and are based on
current expectations and involve a number of assumptions, risks and
uncertainties that could cause the actual results to differ
materially from such forward-looking statements, including our
ability to successfully consummate the Transactions on the
anticipated timeline or at all, our ability to repay debt due in
2023 and 2024, our ability to reduce net recourse debt by $200
million to $250 million annually over the next two years, our
ability to decrease net leverage at the anticipated rate over the
next two years, and our ability to successfully close on the
expected sale of certain non-core assets on the anticipated
timeline or at all. Readers are strongly encouraged to read the
full cautionary statements contained in GEO’s filings with the SEC,
including the risk factors set forth in the Registration Statement
on Form S-4, as amended, including a prospectus and consent
solicitation statement forming a part thereof, the Company has
filed with the SEC. GEO disclaims any obligation to update or
revise any forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20220816005943/en/
Pablo E. Paez 1-866-301-4436 Executive Vice President, Corporate
Relations
Geo (NYSE:GEO)
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