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Corrections Corporation of America Message Board

  • flipper_58 flipper_58 Nov 21, 2000 1:12 PM Flag

    Banks still playing ball

    credit line revised for 6 more months with
    provisions to rise $100mm by June and $200mm by Oct. or else
    MORE increases in rates.

    My guess is they will
    have to another 20 for one reverse before this is all
    over. IMO, a rights offering is going to be the only
    realistic way to raise that money and not have all
    shareholders get totally creamed by an outsider.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • You're still here. I've been out of the country
      for the last three months. Can you provide me w/ a
      quick update on occupancies. Specifically, how are the
      prisons in GA, Cal City, KY, and AZ doing? Do you have
      that info? Any thoughts on the pref. A (coverage-is
      there any?). I hope you didn't buy more in the 8s. I
      tried to keep you away. How's our favorite band member?
      Is he still visiting CCA facilties in KY! :) Hope
      all is well.

      Thx

      • 2 Replies to FranklinHunterMail
      • Attempt 2 here..Yahoo lost first.

        Welcome
        back. You might to look at trader0670's post 15975 as
        he sumed up the lastest CC. EBITDA was $34mm with
        the "I" being $35mm...coverage ratio zero.

        I
        don't own the pref A at this time (and did not average
        down) as I'm waiting for a clearer signal. I have been
        arbitraging the common and the pref B with good success, for
        a change.

        You advice was good, thank you. I
        feel at this point a rights offering is critical after
        their reverse split. The banks will continue to turn up
        the heat until they do.

        Management has also
        indicated margins at the facilities as a whole are a
        problems as costs have creeped up. If they earn 10%
        margins with 10%+ interest costs, as NewMK says, they are
        going no where.

      • Could someone give me the Yahoo or AOL symbols for CXW preferred A and B.

        Thanks -- and happy thanksgiving with or without a president elect the democracy is fairly solid!

    • what choice do they have? IMO, any rights
      offering will have to have a sweetener (as in a
      convertible preferred, or a bond with warrants, or
      something). Otherwise, you could just play the common in the
      marketplace. The saga continues.

    • since I am on the side line, and been for quite
      some time now waiting for "THE" signal, I have some
      time on my hands and have been thinking.

      I
      still see no way this POS can turn it around. One way
      could be to sell properties but even so, I am not
      certain. The common is going to be 25c by Dec 1 if not
      below and the managment is not showing any genuis idea
      that are badly needed in this case. I think all they
      really know what to use is a butter knive. They would
      hurt themselves by trying to handle a meat axe or they
      dont have a meat axe.

      I think that all the
      fluff about, R-split, margins etc is now done and over.
      The only thing left to save this POS lies in the
      expertise of management. This one does not have it.
      Therefore it should come from the outside. The problem is
      any outsider deal is going to be so bad for any kind
      of shareholders that it is not worst it. any
      newcomers will be worst than vultures at this stage. I see
      no PL anymore.

      Buying anything now is
      foolish. In fact, for the first time in my life i may get
      short (although I just hate the concept) after the
      R-split. One could make quite a few bucks there from a
      1-20 r-split. Appears the only way to make money with
      this POS and heck why not get my losses back... I may
      also short on any common spike over $1 if Bush wins.
      Garanteeed return. After all, this POS is now an excellent
      way for inexperienced shorts to make money at low
      risk.

      The sideline idea is a very wise one for now. I saw
      that you have sold your positions and got short. At
      least someone is making out.

      Disclaimer: I have
      no shares short, long or pdf whatever. Just watching
      a supernova exploding.

    • OK
      I bought in on the assumption that the
      price is depressed because of unreasonable fear. But
      the only risk worth taking is the Pfd A
      shares.
      The Pfd A has a $25 face value with a 8% dividend or
      $2 per share.

      Buying in at $3 3/4 was too
      good to miss.
      After tax loss selling lifts, the Pfd
      A will recover.

      • 1 Reply to Sam_Nate6
      • NASHVILLE, Tenn.--(BUSINESS WIRE)--Nov. 21,
        2000--Corrections Corporation of America (formerly Prison Realty
        Trust, Inc.) (NYSE:CXW - news; the ``Company'')
        announced today that it has obtained, effective November
        17, 2000, amendments to the credit agreement
        governing its $1.0 billion senior secured credit facility
        with a syndicate of banks led by Lehman Commercial
        Paper Inc., as Administrative Agent, as well as the
        consent of the bank syndicate to certain transactions
        previously restricted by the facility (the ``Consent and
        Amendment''), thereby avoiding an event of default by the
        Company under the facility. The complete text of the
        Consent and Amendment will be included as an exhibit to a
        Current Report on Form 8-K to be filed by the Company
        with the U.S. Securities and Exchange Commission (the
        ``Commission'') via EDGAR. The Consent and Amendment, which was
        obtained on terms previously described in the Company's
        Quarterly Report on Form 10-Q filed with the Commission on
        November 14, 2000 and as disclosed by the Company,
        replaces the previously existing financial covenants
        contained in the credit agreement governing the facility
        with the following financial covenants, each as
        defined in the Consent and Amendment: (i) total leverage
        ratio; (ii) post merger interest coverage ratio; (iii)
        fixed charge coverage ratio; (iv) ratio of total
        indebtedness to total capitalization; (v) minimum post merger
        EBIDTA; and (vi) total beds occupied ratio. The Consent
        and Amendment also consents to certain transactions
        undertaken or to be completed by the Company and each of
        Prison Management Services, Inc. (``PMSI'') and Juvenile
        and Jail Facility Management Services, Inc.
        (``JJFMSI''), two affiliated service companies, including the
        non-cash mergers of each of PMSI and JJFMSI with and into
        the Company's wholly owned operating subsidiary. As a
        result of this consent, it is anticipated that the
        Company will complete the mergers with the service
        companies prior to December 31, 2000. The Consent and
        Amendment further provides that the Company will be
        required to use commercially reasonable efforts to
        complete a ``capital raising event'' on or before June 30,
        2001

 
CXW
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