The GEO Group, Inc. Announces Exercise in Full of Initial Purchasers' Over-Allotment Option and Closing of Private Offering of 6.50% Exchangeable Senior Notes Due 2026 by Its Subsidiary, GEO Corrections Holdings, Inc.
The GEO Group, Inc. (NYSE: GEO) (“GEO” or the “Company”) announced today that its wholly-owned subsidiary, GEO Corrections Holdings, Inc. (“GEOCH”), has closed its previously announced private offering of $230,000,000 aggregate principal amount of 6.50% exchangeable senior unsecured notes due 2026 (the “notes”), including $30,000,000 aggregate principal amount of notes sold pursuant to the exercise in full of the initial purchasers' over-allotment option to purchase additional notes. The notes are guaranteed by GEO and GEO’s subsidiaries that are guarantors under GEO’s senior credit facility and outstanding senior notes.
The notes will mature on February 23, 2026, unless earlier repurchased or exchanged. GEOCH will pay to the noteholders cash interest at an annual rate of 6.50% plus an additional amount based on the dividends paid by the Company on its common stock, $0.01 par value per share (the “Company’s common stock”). Interest will be payable semiannually in arrears on March 1 and September 1 of each year, beginning on September 1, 2021.
Subject to certain restrictions on share ownership and transfer, holders may exchange the notes at their option prior to the close of business on the business day immediately preceding November 25, 2025, but only under the following circumstances: (1) during the five consecutive business day period after any five consecutive trading day period, or the measurement period, in which the trading price per $1,000 principal amount of notes for each trading day of such measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the exchange rate for the notes on each such trading day; or (2) upon the occurrence of certain specified corporate events. On or after November 25, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date of the notes, holders may exchange their notes at any time, regardless of the foregoing circumstances. Upon exchange of a note, GEO will pay or deliver, as the case may be, cash or a combination of cash and shares of the Company’s common stock.
The initial exchange rate for the notes is 108.4011 shares of Company common stock per $1,000 principal amount of the notes (equivalent to an initial exchange price of approximately $9.225 per share of the Company’s common stock). The exchange rate is subject to certain adjustments.
GEOCH and the Company used net proceeds from this offering, including the exercise in full of the initial purchasers' over-allotment option to purchase additional notes, to fund the redemption of the current outstanding amount of $194.0 million of the Company’s existing 5.875% senior notes due 2022, and intend to use remaining net proceeds to pay related transaction fees and expenses, and for general corporate purposes of the Company.