Corrections Corporation of America Message Board

I'm a tad concerned even about a $5 pref A price
relative to the 12% unsecured bonds trading in the 20-25%
yield for the bid side. I've learned from a few pro's
whenever looking into buying into a distressed company
look at the company debt frist. When the debt
responses greatly, time to buy the common. Those pro's
buying after Asia depression played the recovery this
way. Makes sense as bond holders tend to be more
fundamentally oriented and professional money managers. I
wouldn't think about the common until I saw the pref A and
the debt recover quite a bit. That is a tell-tale
sign credit investors feel at least the company will
be around.

Right now the pref A is trading
near it's all time low. This does not bode well for
the prospects of the common in the near term, I feel.
The debt trades "by appointment" so it's hard to get
a real market. The bid/offer spread was 20-30
POINTS! Liquidity stinks there. The real bid is near $.50
on the dollar.

I don't mean to sound too
negative, I'm just trying to be realistic on what the
"market" seems to be telling us concernng the present
situation.

JMHO

I'm not flipper but I also own the Pref_A. The
stated amount is 8%($2.00). Based on the current price
this is 39% to 48% depending on whether you consider
that one or two dividends are included in the current
price. The last dividend was paid in April. At this time
last year 3 dividends had been paid. Only one has been
paid so far this year.The dividend is cumulative and
will be paid at some point unless the comoany goes
under. There are other rules that involve the placement
of additional directors on the board to represent
Pref_A owners if the dividend is not paid for 6
quarters.

The Pref_A does not mature but is similar to the
Pref_B in that it can be redeemed at the option of the
company after a certain date.

The complete
description and rules relating to the Pref_A can be found in
the numerous SEC filings made by CXW.
Unfortunatately, I don't think any one of those contains all of
the info. You will have to read them all to get a
more complete view of the Pref_A. Somebody with better
records than I may be able to reduce your search to
specific filings.

Pref A.

I can't find a website with good
information about preferreds and listed derivatives. Since
you hold the Pref A, I am sure you can help with
basic info.

What is the stated dividend amount?
When was the last dividend paid? Does is mature? If
so, at what price, and on what date.

Let me
know of any sites with good info on preferreds and
listed derivatives (TRACES etc.)

Thanks for your
help

THANKS again flipper for the answer on where
we would stand if it comes to BR.
Let us hope this will not happen.
THANKS again genepond

""in the case of BR where and how do you think we
would stand.????""

Excellent question and the
most important of all for pref A owners. We stand
fairly low on the spectrum. I'm not an attorney, maybe
someone else could answer your question better but first
the banks and employees salaries, then the $100m
unsecured debentures and general creditors, then pref A., I
believe this is generally the order. That's a lot of
hands out first. At $5 the pref A is trading at $.20 on
the dollar which probably is high for a liquidation
scenario. Just my guess. I would guess $.05 to $.10 on the
dollar as optimistic on a Chap 7 scenario. On average
banks collect 80% on their senior secured
loans(according to Merrill Lynch), leaving $0 for the rest
underneath.

flipper 58
THANK you so very much for the
information on
cxw pref A . This has been the best summary
I
have yet seen about this stock.
IT seems to me that
you have covered the ques-
tions that I would have
asked completely, ex-
cept in the case of BR where
and how do you think we would stand.????
Is the
cxw pref A first to be paid from assets
left after
the Banks get theirs or is there
notes senior to
the pref A. I have been unable to ascertain the
answer.
THANKS again for your time and Courtesy

genepond

If I may butt in, I own some of the pref A too.
The bank loan syndicate stated that CXW must raise
$100mm in new equity by year-end. This has become tall
order. My guess this will not happen by that time and it
could be easily a year or so when/if you would see any
dividends on the pref. A. The thing is the dividends
accrue(accumulate), it's not like a common dividend that disappears.
The pref A will have $1 of back dividends by
year-end. Asset sales will be the key to a fast recovery of
the pref A div., IMO.

My guess is the bank
syndicate will want to see CXW in the black on a regular
basis before any back dividends will happen. This
CERTAINLY will take time and since you�re not "losing" the
dividend I don't thing they would feel any urgency to pay
in a hurry, I wouldn't. They need to use any
"excess" capital to get facilities finished and ramp-ups
for the Feds moving in. This is clear and the right
thing to do, IMO.

I have not rushed to average
down as I feel these type situations take a long time
to work out and we really don't know if it will. My
guess is the banks will have mud on their faces if they
force the States and the Feds to possibly RELOCATE 45
facilities worth of prisoners and then try to sell them back
to the same customers they just pissed off. In this,
I make the assumption they will work things out to
get CXW back on their feet. Think about it, they
force CXW into Chap 11, then prisoners escape, up-rise,
etc.(as they will do)talk about the banks getting bad
press with their �new� customers, the Gov�t agencies,
ouch. And then they could be looking at Gov�t
take-overs at fire sale prices. Doesn�t sound very
attractive does it as an important lender does it with a
reputation?


The beauty of the pref A is it's not effected by the
zillion of new shares created and actually benefits by it
as they pay in shares not cash for obligations. Tax
loss selling will probably keep the pref A down or
heading lower though before its recovery, if CXW makes
it. The pref A will be far more rapid then the common
in recovery. If they recover your have a 40%+ piece
of yield paper(at $5.5 your actual cost is $4.75
because fo accrued div.).

JMHO

Occupancy is key, but so are margins. We need to
see the financials re operating expenses (former
CCA). Are per-bed payments going to be large enough?
Unfortunately the REIT cash flow doesn't reflect this critical
piece.