THE GEO GROUP, INC. (NYSE:GEO) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry Into a Material Definitive Agreement. |
On March23, 2017, The GEO Group, Inc. (GEO or the Company)
executed a third amended and restated credit agreement by and
among GEO and GEO Corrections Holdings, Inc., (Corrections and,
together with GEO, the Borrowers), the Australian Borrowers named
therein, BNP Paribas, as Administrative Agent, and the lenders
who are, or may from time to time become, a party thereto (the
Credit Agreement). The Credit Agreement refinances GEOs prior
$291.0million term loan, reestablishes GEOs ability to implement
at a later date an Australian Dollar Letter of Credit Facility
providing for the issuance of financial letters of credit and
performance letters of credit, in each case denominated in
Australian Dollars up to AUD 275million, an increase from the
prior AUD 225 million Australian Letter of Credit Facility, and
certain other modifications to the prior credit agreement.
The Credit Agreement evidences a Credit Facility (the Credit
Facility) consisting of an $800.0million Term Loan (the Term
Loan) bearing interest at LIBOR plus 2.25% (with a LIBOR floor of
0.75%), and a $900.0million revolving credit facility (the
Revolver) initially bearing interest at LIBOR plus 2.25% (with no
LIBOR floor). As of March23, 2017, the Revolver had approximately
$173.7 million in outstanding borrowings along with approximately
$53.6 million of letters of credit issued thereunder. Amounts to
be borrowed by GEO under the Credit Agreement are subject to the
satisfaction of customary conditions to borrowing. The Term Loan
component is scheduled to mature on March23, 2024. The Revolving
Credit Commitment component is scheduled to mature on May 19,
2021.
The Credit Agreement contains certain customary representations
and warranties, and certain customary covenants that restrict
GEOs ability to, among other things (i)create, incur or assume
any indebtedness, (ii)create, incur, assume or permit liens,
(iii)make loans and investments, (iv)engage in mergers,
acquisitions and asset sales, (v)make certain restricted
payments, (vi)issue, sell or otherwise dispose of capital stock,
(vii)engage in transactions with affiliates, (viii)allow the
total leverage ratio to exceed 6.25 to 1.00, allow the senior
secured leverage ratio to exceed 3.50 to 1.00 or allow the
interest coverage ratio to be less than 3.00 to 1.00, (ix)
cancel, forgive, make any voluntary or optional payment or
prepayment on, or redeem or acquire for value any senior notes,
except as permitted, (x)alter the business GEO conducts, and
(xi)materially impair GEOs lenders security interests in the
collateral for its loans. The restricted payments covenant
remains consistent with GEOs election to be treated as a real
estate investment trust under the Internal Revenue Code of 1986,
effective as of January1, 2013.
Events of default under the Credit Agreement include, but are not
limited to, (i)GEOs failure to pay principal or interest when
due, (ii)GEOs material breach of any representation or warranty,
(iii)covenant defaults, (iv)liquidation, reorganization or other
relief relating to bankruptcy or insolvency, (v)cross default
under certain other material indebtedness, (vi)unsatisfied final
judgments over a specified threshold, (vii)certain material
environmental liability claims which have been asserted against
GEO, and (viii)a change in control.
All of the obligations under the Credit Agreement are
unconditionally guaranteed by certain domestic subsidiaries of
GEO and the Credit Agreement and the related guarantees are
secured by a perfected first-priority pledge of substantially all
of GEOs present and future tangible and intangible
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domestic assets and all present and future tangible and
intangible domestic assets of each guarantor, including but not
limited to a first-priority pledge of all of the outstanding
capital stock owned by GEO and each guarantor in their domestic
subsidiaries.
GEO and certain of its affiliates have previously entered into
commercial financial arrangements with BNP Paribas, the
Administrative Agent for the Credit Agreement, BNP Paribas
Securities Corp., the Lead Arranger for the Credit Agreement, and
with Bank of America, N.A., Barclays Bank PLC, JPMorgan Chase
Bank, N.A., Suntrust Bank and Wells Fargo Securities, LLC, the
Co-Syndication Agents for the Credit Agreement, and/or their
affiliates and/or their affiliates have in the past provided
financial, advisory, investment banking and other services to GEO
and its affiliates, including serving as underwriters for the
sale of 6.9million shares of common stock issued by GEO in March
2017, initial purchasers for the 6.00% Senior Notes due 2026
issued by GEO in April 2016, the 5.875% senior notes due 2024
issued by GEO in September 2014, the 5.875% senior notes due 2022
issued by GEO in October 2013, and the 5.125% senior notes due
2023 issued by GEO in March 2013, and serving as the
Administrative Agent under GEOs prior credit agreement entered
into on August27, 2014, as amended, in the case of BNP Paribas.
The foregoing summary is qualified in its entirety by reference
to the Credit Agreement, a copy of which is filed with this
report as Exhibit 10.1 and is incorporated herein by reference.
Capitalized terms used in the foregoing summary and not defined
are defined in the Credit Agreement.
| Section2 | Financial Information |
| Item2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information contained in Item 1.01 above is incorporated
herein by reference.
GEO is including the following cautionary statement in this Form
8-K to make applicable and take advantage of the safe harbor
provisions of the Private Securities Litigation Reform Act of
1995 for any forward-looking statement made by, or on behalf of,
GEO herein. This Form 8-K Report contains forward-looking
statements regarding future events and the future performance of
GEO that involve risks and uncertainties that could materially
affect actual results. Investors should refer to documents that
GEO files from time to time with the Securities and Exchange
Commission for a description of certain factors that could cause
actual results to vary from current expectations and
forward-looking statements contained in this Form 8-K Report.
Such factors include, but are not limited to, those factors
contained in GEOs Securities and Exchange Commission filings,
including GEOs Form 10-K, 10-Q and 8-K reports.
| Section8 | Other Events |
| Item8.01 | Other Events |
On March27, 2017,
GEO issued a press release announcing that the Board had declared
a 3-for-2 stock split to be effected on April24, 2017 to all
shareholders of record as of April10, 2017. A copy of the press
release announcing the stock split is attached hereto as Exhibit
99.1 and is incorporated by reference herein.
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| Section9 | Financial Statements and Exhibits |
| Item9.01 | Financial Statements and Exhibits. |
| d) | Exhibits |
| 10.1 |
Third Amended and Restated Credit Agreement, dated as of March23, 2017, among The GEO Group, Inc., GEO Corrections Holdings, Inc., as the Borrowers, the Australian Borrowers party thereto, the Lenders party thereto and BNP Paribas, as administrative agent. (Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission to a request for confidential treatment.) |
|
| 99.1 |
Press release, dated March27, 2017, announcing the stock split. |
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to the
requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
| THE GEO GROUP, INC. | ||||||
|
March29, 2017 |
By: |
/s/ Brian R. Evans |
||||
| Date | Brian R. Evans | |||||
|
Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
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EXHIBIT
INDEX
|
Exhibit No. |
Description |
|
| 10.1 |
Third Amended and Restated Credit Agreement, dated as of March23, 2017, among The GEO Group, Inc., GEO Corrections Holdings, Inc., as the Borrowers, the Australian Borrowers party thereto, the Lenders party thereto and BNP Paribas, as administrative agent. (Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission |
About THE GEO GROUP, INC. (NYSE:GEO)
The GEO Group, Inc. is a real estate investment trust (REIT). The Company specializes in the ownership, leasing and management of correctional, detention and re-entry facilities and the provision of community-based services and youth services in the United States, Australia, South Africa and the United Kingdom. The Company operates in four segments: U.S. Corrections & Detention, GEO Care, International Services, and Facility Construction & Design. The Company owns, leases and operates a range of correctional and detention facilities including maximum, medium and minimum security prisons, immigration detention centers, minimum security detention centers, as well as community based reentry facilities, and offers delivery of offender rehabilitation services under its GEO Continuum of Care platform. The GEO Continuum of Care program integrates in-prison programs, which include cognitive behavioral treatment and post-release services. THE GEO GROUP, INC. (NYSE:GEO) Recent Trading Information
THE GEO GROUP, INC. (NYSE:GEO) closed its last trading session up +0.03 at 46.21 with 560,087 shares trading hands.