You are obviously convinced that lack of independance between PZN and OPCO is not a problem. However, I think you are in the minority. Actually, it dosen't matter what you or I think but what the market believes. You should question some of the analyst who downgraded the stock. The ones I have spoken with see this conflict of interest as the main problem. The inability to raise adequate junk debt and concerns about securing the LOC increase are only syptoms.
When I hypothesized on the potential value of PZN with a more realistic 16-18% ROI on new prisons, I was refering to future leases. Go back and read my previous post. This would not effect current leases already negotiated. PZN would only renegotiate existing leased if OPCO were in serious financial jeopardy which I don't think we are near. In fact, ROI has already declined by some 200 basis points under the new fee arrangement.
Obviosly PZN is very much dependant on the financial health of OPCO since it account for 88% of their revenue. If the market wasn't concerned about OPCO, PZN would trade much higher with a yield below that of CPV.