Faster-than-expected operating improvements at Corrections Corporation of America (CXW) have prompted Standard & Poor’s to revise its outlook for the Nashville prison company to “positive” from “stable.” It also affirmed CCA’s “B+” corporate credit rating.
"If CCA is able to continue to improve its financial performance and achieve and maintain stronger credit protection measures, specifically total debt (adjusted for preferred stock) to EBITDA [earnings before interest, taxes, depreciation and amortization] of about 4 times (x) and EBITDA interest coverage in the range of 2.5x to 3.0x, the ratings could be raised during the outlook period,” Standard & Poor's credit analyst Jean C. Stout said in a release.
CCA operates 60 facilities. Its shares were up 12 cents to $16.60 in midday trading. Their 52-week range is $11.69-$19.25.
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