GEO Group Will Redeem $650 Million Of 2029 Notes For About $678 Million, Extends Revolver To 2031
An 8-K shows GEO will pay off its 8.625% secured notes October 15 with asset-sale proceeds and loosened its bank limits on buybacks.
GEO Group will redeem all $650 million of its 8.625% senior secured notes due 2029 on October 15 for about $678 million plus accrued interest, according to an 8-K filed Thursday. The same filing shows an amended credit agreement with Bank OZK that extends the revolver to 2031 and removes a cap on share repurchases, within a leverage limit.
The redemption
GEO delivered the redemption notice on October 5, the day it closed the credit amendment, and a press release followed on October 6. The price is $1,043.13 per $1,000 of principal, plus accrued and unpaid interest up to, but not including, the October 15 redemption date.
GEO will fund the trustee by October 14 using net proceeds from its recently announced asset sales. Once the money is in, the indenture governing the notes is discharged. Payment runs through the Depository Trust Company.
The filing itself says it is not the redemption notice; the redemption proceeds solely under the notice delivered under the indenture.
The amended credit agreement
The Amended and Restated Credit Agreement, dated October 5, names GEO and GEO Corrections Holdings as borrowers and Bank OZK as administrative agent. It keeps the revolving credit commitments at $550.0 million and pushes maturity to July 14, 2031.
It also raises to $750.0 million the amount of added term loans, equivalent debt or revolver increases GEO may request, subject to the agreement's conditions.
The notable change is for shareholders: after the 2029 indenture is discharged, GEO may make unlimited restricted payments, including buybacks, as long as its pro forma total leverage ratio is 2.25 to 1.00 or lower and no default exists.
What it means for buybacks
The press release adds that GEO's indenture for its $625 million 10.25% senior unsecured notes due 2031 permits unlimited restricted payments if consolidated leverage is 2.00 to 1.00 or lower, with no default.
GEO's board recently approved a $750 million increase in its repurchase authorization, from $500 million to $1.25 billion, effective through December 31, 2029. The company says the program does not obligate it to buy any particular amount, and it can be changed or ended at any time.
GEO shares closed at $30.96 on Thursday and traded at $30.64 in after-hours trading, according to market data.
The next dated step is October 14, when GEO must fund the trustee ahead of the October 15 redemption.
Sources
- 8-K Filing — GEO GROUP INC (GEO) — SEC EDGAR
- Exhibit d246793dex991.htm — GEO GROUP INC 8-K exhibit — SEC EDGAR
- The GEO Group Delivers Notice of Redemption for All Senior Secured Notes Due 2029 and Amends and Extends Revolving Credit Facility – Company Announcement - FT.com — Financial Times
