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Lehman Locks Down Add-On For Prison Company

05 Jan 2003

Lehman Brothers is set to close by the end of this month a $30 million add-on piece for Corrections Corporation of America's (CCA), six-year "B" term loan. Pricing remains at LIBOR plus 31/ 2% on the now $595 million institutional tranche. The piece was sold to participating investors in the existing facility, said a banker familiar with the deal. He added that a 10 basis point up-front fee was offered. A Lehman official declined to comment.

The prison company is looking to acquire a new corrections facility, said Philip Kibel, v.p. and senior analyst at Moody's Investors Service, explaining the need for the extra debt. Officials at CCA did not return calls by press time to confirm specific acquisition plans. Moody's had revised CCA's credit outlook to stable last month because of the company's improving financial profile. Its senior secured debt is rated at B1.

Nashville, Tenn.- based CCA's existing facility was put in place last May in order to refinance the company's existing debt. The line also includes a four-year, $75 million "A" term loan and a $75 million revolver, both priced at LIBOR plus 31/ 2%. There is a 1/2 % revolver fee per year. Deutsche Bank, UBS Warburg and Société Générale are also lenders on the credit.


05 Jan 2003