Prison Operator CoreCivic Looks to Raise $450 Million in Junk Bond Market

Michael Tobin and Gowri Gurumurthy, Bloomberg News

CoreCivic plans to use the sale proceeds to buy back its 8.25% senior notes due 2026 and redeem any of those notes that remain outstanding.

, Photographer: David McNew/Getty Images

(Bloomberg) -- Private prison operator CoreCivic Inc. sold $500 million of new notes in an upsized deal as it moves to extend debt maturities.

The Nashville-based company’s new bond has an 8.25% coupon, the tight end of initial pricing discussions, according to people familiar with the matter who asked not to be identified because the information is private. The offering had been targeted to raise $450 million.

The coupon is the same on a 2026 note that CoreCivic has launched an offer to repurchase, along with cash on hand and other borrowings. The new bond matures in 2029 if not called sooner.

Citizens JMP Securities, which is leading the debt offering, didn’t reply to a request for comment.

The 2026 note would be repurchased for $1,043.75 for each $1,000 of principal. The bond last changed hands at 103.65 cents on the dollar, according to Trace. There is $593 million of the issue outstanding.

Some firms that serve the prison industry have had trouble accessing the capital markets lately amid growing investor concerns around environmental, social and governance factors.

Platinum Equity-backed Aventiv Technologies LLC, which provides communications services for prisoners, has struggled to complete a debt restructuring for several months. Meanwhile, private prison operator Geo Group Inc. faces risks on refinancing about $1.8 billion of debt due 2026 through 2028, S&P Global Ratings said in January.