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Corrections Corporation of America Message Board

  • mecosmo2 mecosmo2 Dec 10, 2001 10:19 AM Flag

    Loan Extension and Modification Merry

    Corrections Corporation of America Announces
    Loan Extension and Modification

    NASHVILLE, Tenn. - December 10, 2001 - Corrections Corporation of
    America (NYSE: CXW) announced today that it has completed an amendment
    and restatement of its existing senior credit facility. As part of the
    amendment and restatement, the existing $269.4 million revolving
    portion of the credit facility, maturing on January 1, 2002, was
    replaced with a term loan of the same amount maturing on December 31,
    2002, to coincide with the maturity of other loans under the senior
    credit facility. Lehman Brothers acted as advisor and lead arranger in
    connection with the amendment and restatement.

    All loans under the amended and restated credit facility bear interest
    at a variable rate of 550 basis points over the London Interbank
    Offered Rate ("LIBOR"), through June 30, 2002. Following June 30,
    2002, the applicable interest rate for all loans under the credit
    facility will increase to 650 basis points over LIBOR. In the event
    the company is unable to refinance the entire facility prior to July
    1, 2002, the company will also be required to pay the lenders under
    the facility an additional fee equal to 1.0% of the amounts then
    outstanding under the facility.

    As a result of the amendment and restatement, certain financial and
    non-financial covenants were amended, including the removal of prior
    restrictions on the Company's ability to pay cash dividends on shares
    of its issued and outstanding series A preferred stock. Under the
    terms of the amended and restated credit facility, the Company is
    permitted to pay quarterly dividends on the shares of preferred stock,
    including all dividends currently in arrears.

    "The extension and modification of our senior credit facility
    represents a major step forward in the ultimate restructuring of the
    Company's balance sheet", stated Irving E. Lingo, Jr., the Company's
    Chief Financial Officer. "Extending the loan maturity should a provide
    the Company with the flexibility necessary to appropriately complete a
    permanent refinancing of our senior bank debt. In addition, the
    modification permitting the payment of the series A preferred dividend
    removes a significant impediment to the Company's ability to obtain an
    upgrade from the credit rating agencies, which will also positively
    affect a new financing."

    The complete text of the amended and restated credit agreement
    governing the amended and restated credit facility will be included as
    an exhibit to a Form 8-K to be filed by the Company with the
    Securities and Exchange Commission via EDGAR. To obtain a copy of the
    Form 8-K, please refer to the SEC website,, or the
    Company's website,

    About the Company

    The Company is the nation's largest provider of outsourced corrections
    management services, housing an inmate population larger than that of
    all but five public correctional systems in the United States. The
    Company specializes in owning, operating and managing prisons and
    other correctional facilities and providing inmate residential and
    prisoner transportation services for governmental agencies. In
    addition to providing the fundamental residential services relating to
    inmates, each of the Company's facilities offers a variety of
    rehabilitation and educational programs, including basic education,
    life skills and employment training and substance abuse treatment. The
    Company also provides health care (including medical, dental and
    psychiatric services), institutional food services and work and
    recreational programs. The Company owns or manages 70 facilities,
    including 68 correctional and detention facilities with a total design
    capacity of approximately 65,000 beds in 21 states, the District of
    Columbia and Puerto Rico, of which 68

18.00-0.40(-2.17%)Aug 24 4:02 PMEDT