Corrections Corp. of America has become the latest local company looking to raise millions in debt to rework its balance sheet.
The Nashville-based manager of prisons has filed papers to sell $675 million in debt that would mature in 2020 and 2023. The proceeds of the sale would go toward redeeming $465 million of senior notes that are scheduled to mature in 2017 and have an interest rate of 7.75 percent. The remainder will primarily to pay up to 20 percent of the more than $650 million one-time dividend CCA will pay as part of its recent conversion to a real estate investment trust. As part of that process, the company needs to flush its balance sheet of accumulated earnings.
Separately, company officials said in a filing with the Securities and Exchange Commission that they are working with their banks to grow CCA's $785 million revolving credit line to $900 million and give them the flexibility to bump up that number by another $100 million. Execs also are looking to extend the maturity date of the revolver by a year to December 2017.
CCA joins fellow Nashville-area companies Vanguard Health Systems, Acadia Healthcare, Noranda Aluminum Holding and Healthcare Realty in hitting up debt investors. Combined, those four companies have in the past month raised or plan to soon raise about $1 billion. Shares of CCA (Ticker: CXW) are down slightly at $38.40 in early Thursday trading. Year to date, they've climbed 8 percent.