Movers and SHAKERS
CoreCivic, Inc. (CXW)
A Deal Can Be Done, But At What Cost?
CoreCivic is a diversified government solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. We provide a broad range of solutions to government partners that serve the public good through corrections and detention management, a growing network of residential reentry centers to help address America’s recidivism crisis, and government real estate solutions. We are a publicly traded real estate investment trust and the nation’s largest owner of partnership correctional, detention and residential reentry facilities. We also believe we are the largest private owner of real estate used by U.S. government agencies. The Company has been a flexible and dependable partner for government for more than 35 years. Our employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good.
Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Note Offering. Yesterday, CoreCivic closed an upsized offering of $450 million senior unsecured notes due 2026. The proceeds will be used to repay the outstanding $250 million of 5% senior notes due 2022 and reduce other outstanding indebtedness, which may include redeeming a portion of the $350 million 4.625% senior notes due 2023. Net proceeds from the sale of the notes are expected to be approximately $435.1 million.
Cost? The debt sports a stated 8.25% interest rate, although given the price discount, the effective yield to maturity is 8.5%. Obviously, a premium to the note that is being paid off. Nonetheless, in our opinion, the deal does demonstrate that CoreCivic can obtain financing, even in an uncertain operating environment. Assuming the entire $435 million was used to redeem the above outstanding debt ...
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.