Wednesday, July 20, 2022

The GEO Group (GEO)
Maturity Wall Removed, But at What Cost?

The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 103 facilities totaling approximately 83,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Maturity Wall. The GEO Group has entered into a series of proposed transactions with certain of its secured and unsecured creditors that will, if completed, comprehensively address the substantial majority of the Company’s debt maturity wall. This should remove a significant near-term concern of investors and GEO shares reacted as expected, rising 8.50% yesterday.

Details. Recall, GEO has $278 million of debt payments in 2023 and $1.77 billion of repayments in 2024. Although the operating environment has turned favorable, limited capital markets access makes it unlikely GEO would be able to refinance the debt as it came due. The proposed transactions push the maturity wall out far enough that we believe GEO should be able to successfully refinance any debt that remains outstanding….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.