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The Banks That Finance Private Prison Companies, In the Public Interest, 2016

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The Banks That Finance
Private Prison Companies

In the Public Interest • November 2016

About the Programs Not Profits Campaign
The following report is part of In the Public Interest’s Programs
Not Profits campaign. Each year, the private corrections
industry collects hundreds of millions of dollars in profits from taxpayers. To strengthen safety
and justice in our communities, we should invest that money in improving and expanding
treatment and rehabilitation programs. Programs Not Profits is a multi-year campaign
that promotes replacing private profits that hurt incarcerated people, correctional officers,
and taxpayers, with publicly funded and managed programs that provide job training,
mental health care, and substance abuse treatment. Follow along and get involved at
www.programsnotprofits.org

About In the Public Interest
In the Public Interest is a research and policy center committed to
promoting the common good and democratic control of public
goods and services. We help citizens, public officials, advocacy groups, and researchers better
understand the impacts that government contracts and public-private agreements have on
service quality, democratic decision-making, and public budgets. Our goal is to ensure that
government contracts, agreements, and related policies increase transparency, accountability,
efficiency, and shared prosperity through the provision of public goods and services. For more
information, please visit www.inthepublicinterest.org.

Acknowledgments
In the Public Interest would like to thank the following individuals for providing analysis,
editorial assistance, and review of this report: Dalit Baum, American Friends Service Committee;
Saqib Bhatti, ReFund America Project; Lee Cokorinos, Democracy Strategies; Kevin Connor,
Public Accountability Initiative; Dave Cutler, Service Employees International Union Local 49;
Lisa Hamilton; John Keenan, American Federation of State, County and Municipal Employees;
Sonia Kowal, Zevin Asset Management, LLC; Philip Mattera, Good Jobs First; Jamie Trinkle,
Enlace; and Mark Zagata, Walden Asset Management. We would also like to thank Terry Lutz for
designing this report.
Any errors or omissions in this report are the sole responsibility of In the Public Interest.
Cover photo of Wall Street from ToonariPost. Available under a Creative Commons Attribution-ShareAlike 2.0 Generic license
(creativecommons.org/licenses/by-sa/2.0).
Cover photo of incarcerated woman from Thinkstock Images.

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In the Public Interest
November 2016

Table of Contents
SExecutive
E C T I O Nsummary.
1	
....................................................................................................................................................2

Executive
summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Introduction.
...................................................................................................................................................................5 3
SPrivate
E C T I Oprison
N 2	 companies rely on debt financing from banks................................................................ 7

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private prison companies have billions of dollars of debt................................................................... 7 7
SEC
T I O Nprison
3	
Private
companies rely on revolving credit................................................................................. 9

Private
prison
onterm
debtloans.
financing
from banks. . . . . . . . . . . . . . . . . . . . . . . . . . 9
Private
prisoncompanies
companies rely
rely on
.........................................................................................11
Private prison companies have billions of dollars of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
Private
prison companies rely on corporate bonds.............................................................................12
Private prison companies rely on revolving credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11

Six banks finance most private prison company debt........................................................................17

Private prison companies rely on term loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

Debt financing enables private prison companies to maintain and expand their control of
Private prison companies rely on corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
the criminal justice and immigration enforcement systems.................................................................18
Six banks finance most private prison company debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20

Debt financing enables private prison companies to purchase smaller companies...........18

S E C T I O N 4	

Debt financing enables prison companies to operate with little cash on hand.....................20

Debt financing enables private prison companies to maintain and expand their
Banks profit from private prison companies’ debts....................................................................................21
control
of the criminal justice and immigration enforcement systems. . . . . . . . . . . . . . .  22
Banks
profit from private prison companies’ revolving credit and term loans........................21
Debt financing enables private prison companies to purchase smaller companies. . . . . . . . . . . . . .  22
Banks
profit from
private
prison
companies’
bonds............................................................................23
Debt financing
enables
private
prison
companies
to operate with little cash on hand . . . . . . . . . . .  24
Banks profit from private prison companies’ stock...............................................................................25

SECTION 5

Banks should cease financing private prison companies’ debts..........................................................25
Banks
profit from private prison companies’ debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
Methodology
of sources.
Banks profitand
fromlist
private
prison........................................................................................................................27
companies’ revolving credit and term loans. . . . . . . . . . . . . . . . . . .  26
Banks
profitFilings
from private
prison
companies’ bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
List
of SEC
used as
sources................................................................................................................27
Banks
profit names
from private
prison
companies’
stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
List
of bank
in this
report.
..................................................................................................................30
SAppendix
E C T I O NA:
6	The six banks that play large roles in financing CCA’s and GEO Group’s debts..32

Banks
should
cease
private
prison
companies’
debts. . . . . . . . . . . . . . . . . . . . . . 
31
Appendix
B: The
banksfinancing
that financed
CCA’s
and GEO
Group’s acquisitions
of smaller
Scompanies.......................................................................................................................................................................3
E C T I O N 7	

Notes................................................................................................................................................................................40
Methodology
and list of sources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
A P P E N D I X A	

The six banks that play large roles in CCA’s and GEO Group’s debts . . . . . . . . . . . . . . . . . .  38
APPENDIX B 	

The banks that financed CCA’s and GEO Group’s acquisitions of smaller companies. . . . 45
RE F E R E N C E S

Endnotes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  48
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SEC TI ON 1

Executive summary

P

rivate prison companies hold contracts to operate hundreds of prisons, jails, and
immigration detention centers across the country. By profiting off of incarceration,
private prison companies have a perverse incentive to make business decisions that
lead to more people behind bars. Private prisons also are rife with human rights abuses,
pay correctional officers less than they are paid at publicly managed prisons, and foster
environments unconducive to prisoner rehabilitation.
The two private prison industry leaders, Corrections Corporation of America (CCA) and GEO
Group, depend on debt financing in the form of credit, loans, and bonds to conduct their
day-to-day business operations and acquire smaller companies.*1At the end of June 2016,
CCA had total debts of $1.5 billion and GEO Group had total debts of $1.9 billion.
An analysis of financial documents filed with the U.S. Securities and Exchange
Commission (SEC) over the past 10 years shows that six Wall Street banks play large
roles in financing CCA’s and GEO Group’s debts. These six banks—Bank of America,
JPMorgan Chase, BNP Paribas, SunTrust, U.S. Bancorp, and Wells Fargo—have (1)
extended revolving credit to CCA and GEO Group, (2) provided the two companies with
term loans, and (3) underwritten the two companies’ bonds. For details on each bank’s
involvement in CCA’s and GEO Group’s debts, see Appendix A.
By providing CCA and GEO Group with debt financing, the banks are complicit with the
private prison companies in contributing to and enabling mass incarceration and the
criminalization of immigration. Additionally, by collecting interest and fees on outstanding
debt, the banks are complicit with CCA and GEO Group in profiting from mass incarceration
and the criminalization of immigration.
The banks highlighted in this report should cease providing debt financing for private
prison companies. Until banks do so, their clients and shareholders—including
endowments, churches, universities, socially responsible investors, municipalities, states,
and pension funds—should exert pressure on the banks to cut ties with CCA and GEO
Group. With a successful, concerted effort, CCA and GEO Group will be unable to obtain
debt and continue contributing to and enabling mass incarceration and the criminalization
of immigration.
Private prison companies rely on debt financing from banks to expand their control of
the criminal justice system and immigration enforcement system. By providing loans to
CCA and GEO Group to purchase companies that provide residential reentry and electronic
monitoring services, the banks have helped position the private prison companies to
*	 While Corrections Corporation of America (CCA) rebranded as “CoreCivic” on 28 October 2016, this report continues to use the name
“CCA.”

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receive new business as states and the federal government replace “tough on crime”
policies with “community corrections” policies and replace immigration detention policies
with immigration surveillance policies. Key findings on how banks have enabled the private
prison companies to expand their control of the criminal justice system include:

•	 GEO Group relied on debt to finance the acquisition of eight of the nine

companies it has purchased since 2005 that either manage prisons or provide
electronic monitoring for community corrections. The price tag for the eight
companies GEO Group purchased with debt financing totals $2 billion.✝2 For a list
of banks that played roles in financing GEO Group’s acquisitions, see Table B-1 in
Appendix B.

•	 Since 2013, CCA has acquired three companies that manage residential reentry

centers. CCA relied on debt to finance the acquisition of two of these companies,
which had a combined price tag of $193 million.‡3For a list of banks that played
roles in financing CCA’s acquisitions, see Table B-2 in Appendix B.

Banks generate revenue from collecting interest and fees on CCA’s and GEO Group’s
debts. Since CCA and GEO Group collect their revenue from government contracts, which
the companies use to service their debts, the interest and fees paid to banks are taxpayer
dollars. Key findings on the interest and fees banks collect include:

•	 In 2015, CCA and GEO Group made payments related to interest totaling
$49.1 million and $106.1 million, respectively.§4

•	 Over the lifetime of CCA’s $925 million of bonds, the company will pay
bondholders an estimated $346 million in interest.**5

•	 Over the lifetime of GEO Group’s $1.15 billion of bonds, the company will pay
bondholders an estimated $633 million in interest.✝✝6

•	 CCA and GEO Group pay fees to the banks that are the administrative agents for

revolving credit and that are trustees for bond offerings. CCA and GEO Group also
pay banks fees for extending credit that the private prison companies do not use,
underwriting bonds, and providing other services related to debt.

CCA and GEO Group each have an agreement with a syndicate of banks for a revolving
credit facility in which the private prison companies can borrow and repay funds when
they choose up to the credit limit.‡‡ Key findings about CCA’s and GEO Group’s revolving
credit include:

•	 As of June 2016, a syndicate of 10 banks has loaned CCA a combined $444 million
through the company’s revolving credit. The largest contributors are SunTrust,
Bank of America, Wells Fargo, and JPMorgan Chase, with each loaning 14.7

✝	

To purchase some companies, GEO Group supplemented the debt with cash on hand.
To purchase these companies, CCA might have supplemented the debt with cash on hand.
§	 Interest payments include those that CCA and GEO Group paid to banks as well as non-bank entities that hold the companies’ bonds.
**	 Interest payments include those CCA paid to banks as well as non-bank entities.
✝✝	 Interest payments include those GEO Group paid to banks as well as non-bank entities.
‡‡	 CCA’s and GEO Group’s SEC filings refer to each company’s “revolving credit facility.” Elsewhere in the report, each company’s “revolving
credit facility” is referred to as its “revolving credit.”
‡	

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percent of the credit. The total value of revolving credit extended to CCA equals
$900 million.

•	 As of June 2016, a syndicate of at least six banks—BNP Paribas, Bank of America,
Barclays, JPMorgan Chase, SunTrust, and Wells Fargo—has loaned GEO Group
$450 million through the company’s revolving credit. The proportion that each
bank contributed to the $450 million is not disclosed. The total value of revolving
credit extended to GEO Group equals $900 million.

•	 As administrative agents, Bank of America has been instrumental in CCA’s

revolving credit and BNP Paribas has been instrumental in GEO Group’s revolving
credit. In these roles, Bank of America and BNP Paribas brought the other banks
in the syndicates together and negotiated the specifics of the credit agreements.
When CCA and GEO Group draw from their credit, as the administrative agents,
Bank of America and BNP Paribas also act as go-betweens for the companies and
syndicates of banks.

CCA and GEO Group each have an agreement with a syndicate of banks for a term
loan in which the private prison companies have borrowed a set amount that must
be repaid on an agreed-upon schedule. Key findings about CCA’s and GEO Group’s term
loans include:

•	 As of June 2016, CCA owed eight banks a total of $97.5 million through its term
loan. Regions Bank had loaned the largest portion—$19.6 million. Bank of
America, JPMorgan Chase, SunTrust, and Wells Fargo each had loaned
$14.3 million.

•	 As of June 2016, GEO Group owed at least five banks—BNP Paribas, Bank of

America, Barclays, SunTrust, and Wells Fargo—a total of $291 million through
its term loan.

CCA and GEO Group have issued series of corporate bonds each of which has been
underwritten by a syndicate of banks, meaning the banks have bought all the bonds
and resold them on the secondary market. Key findings about CCA’s and GEO Group’s bond
offerings include:

•	 A syndicate of 10 banks underwrote CCA’s most recent corporate bond offering

of $250 million. Wells Fargo underwrote the largest portion, $42.5 million. Bank
of America, JPMorgan Chase, and SunTrust each underwrote $40 million. A
syndicate of 13 banks, which includes Wells Fargo and U.S. Bancorp, underwrote
CCA’s two other current bond offerings, which total $675 million.

•	 A syndicate of 10 banks underwrote GEO Group’s most recent corporate bond
offering of $350 million. Wells Fargo and SunTrust underwrote the largest
portions, $70 million each. GEO Group has issued three other bond offerings
totaling $800 million.

•	 As trustees, U.S. Bancorp has been instrumental in enabling CCA to offer

corporate bonds, and Wells Fargo has been instrumental in enabling GEO Group
to offer corporate bonds. In these roles, U.S. Bancorp and Wells Fargo enforce the
bond agreements.

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•	 As of October 2016, JPMorgan Chase held the largest share of both CCA’s and

GEO Group’s corporate bonds for which bondholder data were publicly available,
$89 million (9.6 percent of all bonds) and $77 million (6.7 percent of all bonds),
respectively.

A note on the data in this report
The majority of information in this report is based on details included in records CCA and GEO
Group filed with the U.S. Securities and Exchange Commission (SEC). In some instances the records
were lacking information that the authors would have preferred to include. For this reason, the data
in this report do not constitute a comprehensive review of CCA’s and GEO Group’s debts. Rather, the
data provide a baseline for the degree to which banks are or were involved in CCA’s and GEO Group’s
debts. Some banks might be or have been involved in financing CCA’s and GEO Group’s debts in
more ways than are discussed in the following pages. Additionally for this reason, some debt data
are presented for CCA but parallel data are not presented for GEO Group or vice versa.
Also, the degree to which banks are involved in financing CCA’s and GEO Group’s debts changes as
the companies pay back their loans, take out new loans, buy back bonds, issue new bonds, or make
changes to their debt agreements. While reading this report, it is important to take note of the date
included for some data points.
Since CCA and GEO Group provide public functions with public dollars, the details on their debts
should be public information. When the government privatizes services, the public often loses
access to information that would be accessible if the services remained in-house, leaving the
public without the ability to watchdog how their tax dollars are spent.1 For this reason, CCA and
GEO Group should disclose all details on debts that would be disclosed if they were public entities
borrowing money, including, interest rates, lenders, loan amounts, and purpose.

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SEC TI ON 2

Introduction

I

n politics, consensus is hard to come by, but almost everyone agrees that the United States
has an incarceration problem.

That the country has more people in prison and jail than any other has convinced even
formerly “tough on crime” politicians that the criminal justice system needs reform.
High incarceration rates are “very costly for the taxpayers,” says former House Speaker
Newt Gingrich.2 Yet the problem runs deeper than government spending. As the prison
population has quintupled in the past 40 years, an era known as “mass incarceration,”
the burden has fallen disproportionately on people of color. For example, black men are
imprisoned at six times the rate of white men.3 A United Nations panel has described mass
incarceration in the United States as a “system of racial control that operate[s] in a similar
way to how Jim Crow laws once operated.”4
The private prison industry has long been an enabling force for mass incarceration, as well
as the related problem of the criminalization of immigration. As incarcerated and detained
populations have swelled, the business of owning and operating prisons and jails to
incarcerate them has grown into a multibillion-dollar industry. The industry’s two largest
companies, Corrections Corporation of America (CCA) and GEO Group, both publicly traded
corporations, profited a combined $361 million in 2015 alone.5
Incarceration is big business, and like any corporation looking to grow, CCA and GEO
Group rely on debt financing provided by financial institutions, including prominent Wall
Street banks. This report analyzes and presents the specifics of these debts, revealing the
financial underpinnings of the private prison industry. Like all things financial, the details
are complicated, but this much is clear: By providing credit, loans, and bonds, banks, such as
Bank of America, JPMorgan Chase, and Wells Fargo, have enabled the industry to increase
its control of America’s criminal justice system. All the while, the banks have profited from
charging interest and fees.
Both private prison companies consider the ability to obtain debt financing critical to
maintaining profitability.6 Debt financing is crucial not only for building new facilities but
also for adapting to changes in the criminal justice and immigration enforcement systems.
As consensus has formed around the need to send fewer people to prisons, jails, and
detention centers, CCA and GEO Group have diversified into other parts of those systems.
Relying on debt financing, the two companies have acquired other smaller companies in
recent years that provide services, such as reentry facilities (“halfway houses”) and electronic
monitoring, that could grow in use as the incarcerated population declines.
The result of the financial sector’s involvement in the private prison industry fits a familiar
pattern. Nearly a decade ago, the Great Recession exposed the risks of an increasingly

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fancialized economy, one in which financial institutions like banks have outsized power
relative to the rest of the economy.7 The housing crisis passed those risks on to those with far
less power, particularly black and Latino homeowners, who were more than 70 percent more
likely than white homeowners to lose their homes to foreclosure between 2007 and 2009.8
That a handful of banks, particularly those on Wall Street that profited from the housing
crisis, are also profiting from mass incarceration and the criminalization of immigration is
crucial to understanding America’s ongoing economic, racial, and political inequality.
Some have already begun to make this connection. In June 2016, taking cues from
successful divestment campaigns at Columbia University and the University of California
(UC) system, the Berkeley City Council called on the city of Berkeley, CA, to divest from
private prison companies, including CCA and GEO Group. The council also recommended
the city request that its business partners, most notably Wells Fargo, do the same.9 This
report should help others question and research the roles that private prison companies
and banks play in their communities’ finances.
Exposing the financial sector’s role in the private prison industry could be critical to ending
mass incarceration and the criminalization of immigration. Billions of dollars in taxpayer
money and millions of lives are at stake. Every dollar in profit for the private corrections
industry—and for the banks that finance it—is a dollar that could instead be invested in
education, mental health services, and substance abuse treatment. Money currently going
to executives, shareholders, and Wall Street could be spent on addressing the root causes of
crime rather than locking away the symptoms.
This report details how financial institutions, most prominently Wall Street banks, bankroll
the private prison industry.

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SEC TI ON 3

Private prison companies rely on debt
financing from banks

P

rivate prison companies hold contracts to operate hundreds of prisons, jails, and
immigration detention centers across the country. These facilities are plagued with
violence, have high levels of sexual assault, neglect the medical needs of prisoners and
detainees in their care, and are rife with other human rights abuses.10
By profiting from incarceration, private prison companies have a perverse incentive to make
business decisions that lead to more people behind bars. Private prison companies send
executives and lobbyists to federal and state governments to seek people to incarcerate
in their empty beds.11 Private prison companies fail to create environments conducive to
rehabilitation, leading to recidivism rates that are higher than rates in publicly managed
prisons.12 Private prison companies use infractions in prisons to increase the sentence
length served by prisoners, inflating the time people spend incarcerated.13
Additionally, to increase profits, private prison companies cut corners on staffing and
compensation, resulting in prison environments with too few correctional officers,
especially those with experience, endangering prisoner and employee safety.14 Private
prison companies pay their correctional officers a median salary that is 22 percent lower
than the median salary paid to correctional officers in publicly managed prisons.15
The two private prison industry leaders, Corrections Corporation of America (CCA) and GEO
Group, depend on debt financing in the form of credit, bonds, and loans to conduct their
day-to-day business operations as well as expand their control of the criminal justice and
immigration enforcement systems.16 (For more information on the ways CCA and GEO Group use debt
financing, see this report’s section titled, “Debt Financing Enables Private Prison Companies to Maintain and Expand
Their Control of the Criminal Justice and Immigration Enforcement Systems.”)

An analysis of financial documents filed with the U.S. Securities and Exchange Commission
(SEC) over the past 10 years shows that Wall Street banks have extended revolving credit
to CCA and GEO Group, provided the two companies with term loans, and allowed the
two companies to issue bonds. By financing CCA’s and GEO Group’s debts, the banks
are complicit with the private prison companies in contributing to and enabling mass
incarceration and the criminalization of immigration.
The following subsections analyze and present data from the SEC on banks’ involvement in
CCA and GEO Group’s debts.

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Private prison companies have billions of dollars of debt
At the end of June 2016, CCA held $1.5 billion in debt and GEO Group held $1.9 billion in
debt. (See Tables 1 and 2.) These debts are made up of:

•	 Revolving credit facility loans in which CCA and GEO Group make an agreement
with a set of banks to be able to borrow and repay up to a certain amount on any
day until the agreement’s end date.§§8As of June 2016, CCA had used 49 percent
of its $900 million revolving credit limit and GEO Group had used 50 percent of its
$900 million revolving credit limit.17

•	 Term loans in which CCA and GEO Group borrow a set amount from a set of

banks that must be repaid on an agreed-upon schedule. When CCA signed the
term loan agreement in October 2015, the principal was $100 million.18 As of June
2016, CCA had paid $2.5 million of the loan.19 When GEO Group signed the term
loan agreement in August 2014, the principal was $296,250,000.20 As of June 2016,
GEO Group had paid down the loan to $291 million.21

•	 Bonds in which CCA and GEO Group issue a series of notes in exchange for

money. The two companies work with a syndicate of banks that underwrite the
bonds, meaning the banks buy all the notes, which they resell to institutional
investors, municipalities, endowments, and others. CCA and GEO Group then
repay the bonds by their maturity date. As of June 2016, CCA had issued $925
million of bonds and GEO had issued $1.15 billion.22

In 2015, CCA paid $49.7 million and GEO Group paid $106.1 million in payments related to
interest on their debts.23 GEO Group’s filings with the SEC from December 2015 estimated
that the company would pay $1 billion in future interest payments on its debt.24

§§ Note: CCA’s and GEO Group’s SEC filings refer to each company’s “revolving credit facility.” Elsewhere in the report, each company’s

“revolving credit facility” is referred to as its “revolving credit.”

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Table 1: CCA owes $1.5 billion in debt (as of June 30, 2016)25
Type of Debt
Term loan

Loan Date

Maturity Date

Amount

2015

2020

$97,500,000

2013/2015

2020

$444,000,000

4.125% bonds

2013

2020

$325,000,000

5.0% bonds

2015

2022

$250,000,000

4.625% bonds

2013

2023

$350,000,000

Revolving credit

Total

$1,466,500,000

Note: The revolving credit’s loan date is expressed as “2013/2015” because the original revolving credit agreement
(from 2013) was amended (in 2015).

Table 2: GEO Group owes $1.9 billion in debt (as of June 30, 2016)26
Type of Debt

Loan Date

Maturity Date

Amount

Term loan

2014/2016

2020

$291,000,000

Revolving credit

2014/2016

2021

$450,000,000

5.875% bonds

2013

2022

$250,000,000

5.125% bonds

2013

2023

$300,000,000

5.875% bonds

2014

2024

$250,000,000

6.0% bonds

2016

2026

$350,000,000

Total

$1,891,000,000

Note: This table excludes non-recourse debt and other debts that GEO Group includes in its financial statements. The
company’s total debt is $2,268,940,000 and the company’s long-term debt is $1,869,281,000. The term loan’s and revolving
credit’s loan dates are expressed as “2014/2016” because the original agreements (from 2014) were amended (in 2016).

Each of the next three subsections reviews banks’ involvement in a different type of debt:
revolving credit loans, term loans, and bonds.

Private prison companies rely on revolving credit
As of June 2016, a syndicate of 10 banks had loaned CCA a combined $444 million through
the company’s revolving credit, which totaled $900 million. The 10 banks contributed
different amounts of the $444 million based on the percentage of credit each bank had
agreed to extend. Since SunTrust, Bank of America, Wells Fargo, and JPMorgan Chase each
extended 14.7 percent of the $900 million credit, each of the four banks supplied 14.7
percent, or $65.4 million, of the $444 million. (See Table 3.) The syndicate of banks extended the
revolving credit to CCA in July 2015 and agreed that CCA can take out loans from the credit
through July 2020.27 As of June 30, 2016, the weighted average interest rate for CCA’s loans
under its revolving credit was 2.0 percent.28 (For more details on the interest rate, see the subsection of this
report titled “Banks Profit from Private Prison Companies’ Revolving Credit and Term Loans.”)

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Table 3: Ten banks have loaned CCA $444 million through the company’s revolving credit
(as of June 30, 2016)29

Bank

Loan

(millions)

Line of Credit
(millions)

Commitment
Percentage

SunTrust

$65.4

$132.5

14.7%

Bank of America

$65.4

$132.5

14.7%

Wells Fargo

$65.4

$132.5

14.7%

JPMorgan Chase

$65.4

$132.5

14.7%

PNC

$44.4

$90.0

10.0%

U.S. Bank (owned by U.S. Bancorp)

$39.5

$80.0

8.9%

Regions

$37.0

$75.0

8.3%

Citizens Bank of Pennsylvania

$32.1

$65.0

7.2%

First Tennessee

$17.3

$35.0

3.9%

Pinnacle

$12.3

$25.0

2.8%

$444.0

$900.0

100%

Total

Note: “Commitment Percentage” is proportion of the total revolving credit that each bank has agreed to extend.

One bank in particular, Bank of America, as CCA’s administrative agent, has been
instrumental in both securing the revolving credit and providing loans through the credit.
When CCA decided that it needed to increase its line of credit to $900 million (CCA’s prior
line of credit was $785 million), Bank of America brought the other banks together and
negotiated the specifics of the 114-page credit agreement.30 Additionally, when CCA draws
from the credit, Bank of America acts as a go-between for the company and other banks. For
conventional loans, CCA first requests a sum of money from Bank of America, which then
collects the funds from the banks and wires the money to CCA.31 For swingline loans, which
have short terms, Bank of America loans the money directly to CCA and then is reimbursed
by the nine other lenders.32
Bank of America, along with Wells Fargo, also agreed in the revolving credit agreement to
issue letters of credit on behalf of CCA. As the “issuing lenders,” these two banks allow CCA
to conduct certain business transactions without first setting money aside, since the letters
of credit guarantee that the banks will pay if CCA reneges.33 These letters of credit save
money or generate revenue for CCA as the funds the company would need to set aside can
now be invested elsewhere. As of June 2016, the banks had issued letters of credit worth
$10.3 million on behalf of CCA to cover the fees and claims under the company’s selfinsured workers’ compensation plan if CCA does not pay.34

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How big are the lines of credit banks have extended to CCA and
GEO Group?
CCA’s and GEO Group’s $900 million lines of credit are large enough to fund most types
of the companies’ expenses.35 A useful point of comparison is the number of months for
which CCA and GEO Group could cover their operating expenses relying solely on their revolving
credit. In 2015, CCA’s and GEO Group’s total operating expenses were $1.5 billion and $1.6 million
respectively. If CCA were to pay for its expenses using all the company’s revolving credit, CCA
could have funded its operations for seven months and four days. If GEO Group were to pay for its
expenses using all the company’s revolving credit, GEO Group could have funded its operations for
six months and 22 days.36

As of June 2016, a syndicate of at least six banks—BNP Paribas, Bank of America, Barclays,
JPMorgan Chase, SunTrust, and Wells Fargo—has loaned GEO Group $450 million through
the company’s revolving credit.37 Each bank’s contribution to the $450 million is based on
the banks’ credit commitments recorded in the agreement’s lender addendums, which are
not publicly available.38 The line of credit was originally $700 million, but the banks agreed to
extend it to $900 million in May 2016.39 When the line of credit was extended, GEO Group’s
loans under its revolving credit had an interest rate of the London Interbank Offered Rate
(LIBOR) plus 2.25 percent.40 (For more details on the interest rate, see the subsection of this report titled “Banks
Profit from Private Prison Companies’ Revolving Credit and Term Loans.”)

BNP Paribas is the administrative agent for GEO Group’s revolving credit. Similar to the
role Bank of America played as administrative agent for CCA’s revolving credit, BNP
Paribas brought the other banks together and crafted the credit agreement with GEO
Group. Similarly, when GEO Group draws on its credit, either via a conventional loan or a
swingline loan, BNP Paribas coordinates the transfer of money from the syndicate of banks
to GEO Group.41
BNP Paribas along with Bank of America and HSBC have agreed to issue letters of credit on
behalf of GEO Group.42 As of June 2016, the banks had issued letters of credit to GEO Group
worth $54.2 million part of which were used to guarantee the financing, construction, and
operation of the company’s facilities in Australia and South Africa.43

Private prison companies rely on term loans
In October 2015, a syndicate of eight banks agreed to give CCA a $100 million term loan
with a maturity date of July 2020.44 CCA made a principal payment of $1.25 million and a
corresponding interest payment in each of the first two quarters of 2016, bringing CCA’s
term loan debt to $97.5 million as of June 2016.45 The banks contributed different amounts
to the loan, with Regions Bank contributing the largest portion. As of June 2016, CCA owed
Regions Bank $19.6 million. (See Table 4.) The interest rate is variable. As of June 2016, it was
2.0 percent.46 (For more details on the interest rate, see the subsection of this report titled “Banks Profit from Private
Prison Companies’ Revolving Credit and Term Loans.”)

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Table 4: Eight banks have loaned CCA $97.5 million through the company’s term loan
(as of June 30, 2016)47

Bank

Loan (millions)

Commitment
Percentage

Regions

$19.6

20.1%

Bank of America

$14.3

14.7%

JPMorgan Chase

$14.3

14.7%

SunTrust

$14.3

14.7%

Wells Fargo

$14.3

14.7%

PNC

$9.8

10.0%

Citizens Bank of Pennsylvania

$7.0

7.2%

First Tennessee

$3.8

3.9%

$97.5

100%

Total

Note: “Commitment Percentage” is proportion of the total term loan each bank has agreed to lend.

One bank in particular, Bank of America, played a key role in providing the term loan to CCA.
As the administrative agent for the term loan, Bank of America played a role similar to which
it played as administrative agent for the revolving credit, chiefly bringing together the other
banks and negotiating the specifics of the loan agreement.48
As of June 2016, GEO Group owed $291 million through its term loan.49 Since GEO Group’s
term loan agreement is attached to the company’s revolving credit agreement, the syndicate
of banks involved is similar—BNP Paribas, as the administrative agent, brought together
Bank of America, Barclays, SunTrust, Wells Fargo, and possibly other banks to contribute funds
for the loan.50 Unlike CCA’s filings with the SEC, GEO Group’s filings do not disclose the dollar
value each bank contributed to the loan. The banks’ initial term loan to GEO Group in 2013
was for $300 million, but the company has paid back $9 million of the principal as of June
30, 2016.51 The interest rate is variable, but as of June 30, 2016, GEO Group’s term loan had an
interest rate of LIBOR plus 2.5 percent.52 (For more details on the interest rate, see the subsection of this report
titled “Banks Profit from Private Prison Companies’ Revolving Credit and Term Loans.”)

Private prison companies rely on corporate bonds
As of June 2016, CCA had agreements with syndicates of banks to underwrite three sets of
corporate bonds totaling $925 million. (See Table 1.) As underwriters, the banks purchase the
bonds from CCA and then resell them to entities such as pension funds, endowments, and
other institutional investors.
In September 2015, CCA issued $250 million of bonds with 5 percent interest due in 2022.53
A syndicate of 10 banks underwrote the bonds, with Wells Fargo underwriting the largest
portion, $42.5 million. (See Table 5.) Over the lifetime of the bonds, CCA will pay $89 million in
interest to the bondholders. (See Table 14.)
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Table 5: Ten banks underwrote CCA’s 5.0% bonds due in 202254
Bank

Amount Underwritten
(millions)

Wells Fargo

$42.5

Merrill Lynch (owned by Bank of America)

$40.0

JPMorgan Chase

$40.0

SunTrust

$40.0

PNC

$24.4

U.S. Bancorp

$21.9

Regions

$20.0

RBS

$12.5

FTN (owned by First Tennessee)

$6.3

Macquarie Capital

$2.5

Total

$250

In April 2013, CCA issued two other sets of bonds—one set totaling $325 million due in
2020 with an interest rate of 4.125 percent, and another set totaling $350 million due in
2023 with an interest rate of 4.625 percent.55 CCA’s SEC filings show that the same syndicate
of 13 banks underwrote both sets of bonds but do not show the proportion of the bonds
each bank agreed to underwrite. These 13 banks were:

•	 Merrill Lynch (owned by Bank of America);
•	 JPMorgan Chase;
•	 SunTrust;
•	 Wells Fargo;
•	 PNC;
•	 U.S. Bancorp;
•	 HSBC;
•	 BB&T;
•	 RBS;
•	 Fifth Third;
•	 Barclays;
•	 Avondale Partners; and
•	 Macquarie Capital.
56

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One bank in particular, U.S. Bancorp, as the trustee, has been instrumental in enabling
CCA to issue the bonds. Bond buyers require corporations that issue bonds to designate a
trustee that protects the bond buyers’ interests. In this role, U.S. Bancorp ensures that CCA
complies with the terms of the bond agreement, such as paying the interest as scheduled,
and attempts to recoup funds for the bond buyers if CCA defaults.57 U.S. Bancorp is the
trustee for all three sets of CCA’s bonds.58
As of June 2016, GEO Group had agreements with syndicates of banks to underwrite four
sets of corporate bonds totaling $1.15 billion. (See Table 2.) GEO Group issued its most recent
set of bonds, totaling $350 million, in April 2016. These bonds have a 6 percent interest
rate and a 2026 due date.59 A syndicate of 10 banks underwrote these bonds, with Wells
Fargo and SunTrust underwriting the largest portions, $70 million each. (See Table 6.) Over
the lifetime of the $350 million bonds, GEO Group will pay $210 million in interest to the
bondholders. (See Table 15.)
Table 6: Ten banks underwrote GEO Group’s 6.0% bonds due in 202660
Bank

Amount
Underwritten (millions)

Wells Fargo

$70.0

SunTrust

$70.0

Merrill Lynch (owned by Bank of America)

$49.0

Barclays

$49.0

JPMorgan Chase

$42.0

BNP Paribas

$24.5

HSBC

$14.0

Fifth Third

$10.5

Regions

$10.5

TD

$10.5

Total

$350.0

In September 2014, GEO Group issued a set of bonds totaling $250 million that
had a 5.875 percent interest rate and a 2024 due date.61 Eight banks came together
to underwrite these bonds, with Merrill Lynch, owned by Bank of America, and Barclays
underwriting the largest portions, $48.1 million each. (See Table 7.) Over the lifetime of
the $250 million bonds, GEO Group will pay $148 million in interest to the bondholders.
(See Table 15.)

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Table 7: Eight banks underwrote GEO Group’s 5.875% bonds due in 202462
Bank

Amount Underwritten
(millions)

Merrill Lynch (owned by Bank of America)

$48.1

Barclays

$48.1

SunTrust

$43.8

JPMorgan Chase

$31.3

Wells Fargo

$31.3

BNP Paribas

$18.8

HSBC

$18.8

TD

$10.0

Total

$250.0

In October 2013, GEO Group issued a set of bonds totaling $250 million with an interest
rate of 5.875 percent and a due date of 2022.63 In March 2013, GEO Group issued a set of
bonds totaling $300 million with an interest rate of 5.125 percent and a due date of 2023.64
GEO Group’s SEC filings do not show the banks that underwrote these two sets of bonds,
however records show that Wells Fargo is the representative of the initial purchasers for the
5.875% bonds and Merrill Lynch, owned by Bank of America, is the representative of the
initial purchasers for the 5.125% bonds.65 While In the Public Interest could not determine
Wells Fargo’s and Merrill Lynch’s duties as initial purchasers, the banks likely helped facilitate
the sale of the bonds to the buyers.
Wells Fargo is the trustee for GEO Group’s four sets of bonds, and plays a similar role that U.S.
Bancorp plays as the trustee for CCA’s bonds, namely enforcing the bond agreements.66
As discussed earlier, underwriters sell the notes to institutional investors, endowments,
pensions, municipalities, and others in secondary markets. Once sold by the underwriters,
the bonds can change hands any day, as the entities that hold the bonds can resell them
at any time. Out of CCA’s and GEO Group’s bondholders that are publicly known, JPMorgan
Chase, through its subsidiaries such as JP Morgan Investment Management, held the largest
share of both CCA’s and GEO Group’s bonds—$89 million (9.6 percent of all bonds) and
$77 million (6.7 percent of all bonds) respectively as of 14 October 2016. (See Tables 8 and 9.)

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Table 8: Twenty-five investors hold one-third of CCA bonds67
Rank

Bond Holder

Value of Bonds
Held (millions)

Percent of
All Bonds

1

JP Morgan Investment Management

$52.2

5.64%

2

New York Life Insurance Company

$30.9

3.34%

3

JP Morgan Investment Mgmt

$30.5

3.29%

4

New York Life Insurance & Annui

$30.4

3.28%

5

Nationwide Life Insurance Compa

$28.0

3.03%

6

Putnam Investment Management

$16.7

1.80%

7

Oppenheimer Funds Inc

$14.7

1.59%

8

Northwestern Mutual Life Insur

$11.0

1.19%

9

Genworth Life Ins Co

$10.3

1.11%

10

Robeco Luxembourg S.A.

$9.5

1.02%

11

Travelers Indemnity Company

$9.0

0.97%

12

UBS Strategy Fund Mgmnt Company

$7.2

0.78%

13

Fidelity Management & Research

$7.0

0.75%

14

Thrivent Financial For Lutheran

$6.3

0.68%

15

Mackenzie Financial Corporation

$6.3

0.68%

16

Thrivent Financial Lutherans

$6.1

0.66%

17

Pimco Funds Global Investors

$5.6

0.61%

18

IG Investment Management Limite

$5.2

0.57%

19

New York Life Investment Mgt

$5.2

0.56%

20

Payden & Rygel

$5.1

0.55%

21

Blackrock Advisors LLC

$5.0

0.54%

22

Nationwide Mutual Insurance Co

$5.0

0.54%

23

JPMorgan Asset Management

$4.9

0.52%

24

Advent Capital Management

$4.3

0.47%

25

SEI Investments Fund Management

$4.3

0.47%

Note: Many of the bondholders are subsidiaries of parent companies, some of which also hold bonds. For example, JP Morgan Investment
Management (in the first row) is a subsidiary of JP Morgan Asset Management (in the twenty-third row). Some of the bondholders are
subsidiaries of parent companies that have numerous subsidiaries with similar names. For this reason, the bondholders’ names in this table
are as they appear in the source (Bloomberg Terminal’s database), even for names that appear to have been truncated (e.g., “Nationwide Life
Insurance Compa” in the fifth row). Additionally for this reason, In the Public Interest did not combine the data for bond holders with names
that appear to be the same (e.g., “JP Morgan Investment Management” in the first row and “JP Morgan Investment Mgmt” in the third row).

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Table 9: Twenty-five investors hold one-third of GEO Group bonds68
Rank

Bond Holder

Value of Bonds
Held (millions)

Percent of
All Bonds

1

JP Morgan Investment Management

$49.0

4.26%

2

Muzinich & Co Inc

$32.8

2.85%

3

Blackrock Advisors LLC

$30.9

2.69%

4

JP Morgan Investment Mgmt

$25.8

2.24%

5

New York Life Insurance Company

$23.6

2.05%

6

Metropolitan Life Insurance Co

$20.1

1.75%

7

Northwestern Mutual Life Insur

$19.5

1.70%

8

Delaware Management Company

$18.9

1.65%

9

Hotchkis & Wiley Capital Mgmt

$17.7

1.54%

10

New York Life Insurance & Annui

$17.4

1.51%

11

SEB Asset Management SA

$14.3

1.24%

12

Pacific Investment Management C

$12.8

1.11%

13

Nordea Investment Funds

$11.8

1.03%

14

Guggenheim Capital LLC

$11.6

1.01%

15

Allstate Life Insurance Company

$11.5

1.00%

16

SEI Investments Fund Management

$10.3

0.89%

17

New York Life Investment Mgt

$9.6

0.84%

18

Rebeco Luxembourg S.A.

$9.5

0.82%

19

Wells Fargo Funds Management LL

$9.4

0.81%

20

Fidelity Management & Research

$9.2

0.80%

21

Allstate Insurance Companies

$8.6

0.74%

22

Bankers Life & Casualty Company

$8.3

0.72%

23

Blackrock Group Limited

$7.7

0.67%

24

Legg Mason Partners Fund Adviso

$7.3

0.63%

25

Nuveen Fund Advisors LLC

$6.8

0.59%

Note: Many of the bondholders are subsidiaries of parent companies, some of which also hold bonds. For example, New York Life Insurance
& Annui[ty] (in the tenth row) is a subsidiary of New York Life Insurance Company (in the fifth row). Some of the bondholders are subsidiaries
of parent companies that have numerous subsidiaries with similar names. For this reason, the bondholders’ names in this table are as they
appear in the source (Bloomberg Terminal’s database), even for names that appear to have been truncated (e.g., “Northwestern Mutual Life
Insur”). Additionally for this reason, In the Public Interest did not combine the data for bond holders with names that appear to be the same
(e.g., “JP Morgan Investment Management” in the first row and “JP Morgan Investment Mgmt” in the fourth row).

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Six banks finance most private prison company debt
Six banks—Bank of America, JPMorgan Chase, BNP Paribas, SunTrust, U.S. Bancorp, and
Wells Fargo—have played large roles in extending revolving credit to CCA and GEO Group,
providing the two companies with term loans, and allowing the two companies to issue
bonds. These six banks have extended larger lines of credit, given larger term loans, and
underwrote more bonds than have other banks. These six banks also play key roles in the
agreements, such as being the administrative agent for the revolving credit or the trustee
for the bond offering.
The tables in Appendix A present details of the involvement of these six banks in financing
CCA’s and GEO Group’s debts. Key findings from the tables about CCA’s and GEO Group’s
debts that were current as of June 30, 2016 are listed here:

Bank of America

•	 Administrative agent, swingline lender, and issuing lender for the syndicate

of banks that loaned CCA $444 million through the company’s $900 million in
revolving credit.

•	 Administrative agent for the syndicate of banks that loaned CCA $97.5 million
through a term loan.

•	 Loaned CCA $80 million.
•	 Part of the syndicate of banks that loaned GEO Group $741 million.
•	 Underwrote at least $138 million of CCA’s and GEO Group’s bonds.
BNP Paribas

•	 Administrative agent for the syndicate of banks that loaned GEO Group $450
million through the company’s $900 million in revolving credit.

•	 Administrative agent for the syndicate of banks that loaned GEO Group $291
million through a term loan.

•	 Underwrote at least $43 million of GEO Group’s bonds.
JPMorgan Chase

•	 Loaned CCA $80 million.
•	 Part of a syndicate of banks that loaned GEO Group $450 million.
•	 Underwrote at least $113 million of CCA’s and GEO Group’s bonds.
•	 Held $166 million of CCA’s and GEO Group’s bonds as of October 14, 2016.

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SunTrust

•	 Loaned CCA $80 million.
•	 Part of a syndicate of banks that loaned GEO Group $741 million.
•	 Underwrote at least $154 million of CCA’s and GEO Group’s bonds.
U.S. Bancorp

•	 Loaned CCA $39 million.
•	 Trustee for all of CCA’s bond offerings.
•	 Underwrote at least $22 million of CCA’s bonds.
Wells Fargo

•	 Loaned CCA $80 million.
•	 Part of a syndicate of banks that loaned GEO Group $741 million.
•	 Trustee for all four of GEO Group’s bond offerings.
•	 Underwrote at least $144 million of CCA’s and GEO Group’s bonds.

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SEC TI ON 4

Debt financing enables private prison
companies to maintain and expand
their control of the criminal justice and
immigration enforcement systems

C

CA and GEO Group use the debt financing from Wall Street banks to purchase smaller
companies and pay for day-to-day business activities. In this way, the banks enable CCA
and GEO Group to operate their businesses and expand their control of the criminal justice
system and immigration enforcement systems. The following subsections provide details on
how CCA and GEO use funds from their credit, loans, and bonds.

Debt financing enables private prison companies to
purchase smaller companies
In recent years, GEO Group has acquired several companies that either manage prisons or
provide electronic monitoring for probation, community corrections, and pretrial programs.
GEO Group relied on loans to finance acquisition of eight of the nine companies purchased
since 2005. The price tag for the eight companies GEO Group purchased with debt
financing totaled $2 billion.69
Most recently, GEO Group used loans from five banks in May 2015 to purchase Soberlink,
Inc., which provides alcohol monitoring services using mobile devices. GEO Group’s filings
with the SEC show that it financed the acquisition of Soberlink with loans from its revolving
credit. At that time, BNP Paribas was the administrative agent, and Bank of America,
Barclays, SunTrust, and Wells Fargo were the lenders for GEO Group’s revolving credit.70
When GEO Group purchased B.I. Inc., which manages GPS ankle monitoring programs, in
February 2011, GEO Group relied on debt from its term loan and bonds. At the time, BNP
Paribas was the administrative agent for the term loan, and Wells Fargo, Merrill Lynch,
Barclays, JPMorgan Chase, and SunTrust underwrote the bonds.71
For a list of banks that played roles in financing each of GEO Group’s acquisitions since 2005,
see Table B-1 in Appendix B.
CCA did not acquire any companies from 2005 to 2012, but since 2013, has acquired
three companies that manage residential reentry centers. CCA relied on loans through
its revolving credit to finance the acquisition of two of these companies, Correctional
Management, Inc., which operated residential reentry centers in Colorado, and Avalon
Correctional Services, which operated residential reentry centers in Texas, Oklahoma, and
Wyoming. The price tag for these two companies was $193 million.72

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CCA’s filings with the SEC show that it financed the acquisition of Correctional Management
and Avalon Correctional with loans from its revolving credit. At that time, Bank of America
was the administrative agent, and Wells Fargo, SunTrust, JPMorgan Chase, and U.S. Bank
(owned by U.S. Bancorp) were among the lenders for CCA’s revolving credit.73
For a complete list of banks that played roles in financing CCA’s acquisition of Correctional
Management and Avalon Correctional, see Table B-2 in Appendix B.
The banks that give loans to CCA and GEO Group directly profit when the private prison
companies use debt to finance the acquisition of other companies. GEO Group’s filings with
the SEC quantify the payments banks receive when the private prison company finances
the acquisition of other companies with debt. By December 2015, GEO Group had paid its
lenders $6.8 million in interest for the debt incurred from the acquisition of LCS Corrections
Services in February of that year.74 By December 2015, GEO Group had also paid its lenders
$1.2 million in interest for the debt incurred from the acquisition of Soberlink in May of
that year.75
The loans banks gave CCA and GEO Group have been instrumental in allowing the
companies to expand their control of the country’s criminal justice and immigration
enforcement systems. Specifically, the loans given to CCA that allowed it to acquire
residential reentry center companies and the loans given to GEO Group that allowed it
acquire electronic monitoring companies have enabled CCA and GEO Group to provide
corrections and immigration services for people who are not incarcerated in facilities.
By purchasing residential reentry and ankle monitoring companies, CCA and GEO Group
are positioned to receive new business as states and the federal government repeal “tough
on crime” policies and implement polices focused on community corrections.76 CCA and
GEO Group are also positioned to receive new business if immigration authorities replace
detention policies with surveillance policies. In April 2016, GEO Group Vice President
Ann Schlarb told investors that GEO Group believes “that the emphasis on offender
rehabilitation and community reentry programs as part of criminal justice reform will create
growth opportunities for our company.”`77
The purchased companies have brought millions of dollars of new revenue to GEO Group
and CCA. Cornell Companies, which was purchased in August 2010, generated an additional
$180 million for GEO Group in 2011.78 CCA estimated that purchasing Avalon in October
2015 would generate an additional $35-$40 million in annual revenues.79

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Debt financing enables private prison companies to
operate with little cash on hand
The syndicate of banks that has extended revolving credit to CCA and GEO Group has
provided a way for the private prison companies to pay for day-to-day expenses under a
business model with favorable tax treatment but limited cash flow.
To take advantage of low tax rates, in 2012 and 2013 GEO Group and CCA, respectively,
converted their corporate structures to real estate investment trusts (REITs).80 As REITs, GEO
Group and CCA pay a fraction of the income tax they would otherwise need to pay. In 2015,
GEO Group paid $1.5 million in federal income taxes and $1.4 million in state income taxes
and received a $42.5 million REIT tax benefit.81
Federal law requires REITs to pass on 90 percent of taxable income to shareholders.82 As a
result, CCA and GEO Group have little cash on hand to pay for their day-to-day expenses,
such as overhead costs at prisons, compensation for staff, and costs to market empty
facilities. To ensure they can cover these expenses without a cash reserve in the bank, CCA
and GEO Group rely on revolving credit, in which they can borrow money on any day so
long as the total amount borrowed does not surpass the agreed-upon limit.

Other ways private prison companies rely on debt financing
In addition to using revolving credit, term loans, and bonds to purchase smaller companies
and pay for day-to-day business expenses, CCA and GEO Group also use debt financing to
build new prisons. While the companies do not disclose how they finance the construction
of individual facilities, their filings with the SEC show that for some new facilities, they use
loans from banks as well as funds from bonds offerings.83
One of the most common uses for CCA’s and GEO Group’s debts, according to the
companies’ SEC filings, is to pay back old debt, often to refinance at a lower rate or extend
the maturity of their debt. For example, in 2013 GEO Group issued a set of bonds with an
interest rate of 5.875 percent and a due date of 2022 to buy back a set of older bonds that
had an interest rate of 7.75 percent and a due date of 2017. The net effect of the bond
offering was to lower GEO Group’s interest rate on its debt by 1.875 percent and extend the
due date by five years.84

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SEC TI ON 5

Banks profit from private prison
companies’ debts

W

all Street banks that provide loans and underwrite bonds for private prison
companies profit from interest and fees.*** Since CCA and GEO Group collect their
revenue from government contracts, which the companies use to service their debt, the
interest and fees paid to banks are taxpayer dollars. CCA’s and GEO Group’s filings with the
SEC show that in 2015, the two companies made payments related to interest totaling
$49.1 million and $106.1 million, respectively. (See Table 10.) CCA’s filings also show that the
company’s weighted average effective interest rate was 3.9 percent.85 GEO Group’s filings
also estimate that the company will pay $1 billion in future interest payments on its debt.86
CCA’s and GEO Group’s financial disclosure forms do not disclose specifics on the total
amount of fees paid to these banks.
Table 10: Private prison companies pay millions in interest for debt87
Company

Payments related to interest
for first half of 2016 (millions)88

Payments related to interest
for 2015 (millions)89

CCA

$34.3

$49.7

GEO Group

$60.5

$106.1

Note: The payments in this table include those CCA and GEO Group make on their debt under their revolving credit, term loans, bonds, and
other interest-related costs.

Many banks that provide loans and underwrite bonds for CCA and GEO Group also own
shares of the companies or buy shares on behalf of their clients. These banks first profit from
the interest and fees they collect from CCA and GEO Group, and then can profit again or
reap other benefits if the investments CCA and GEO Group make with the debt cause stock
prices to rise or generate dividends.
By collecting fees and interest from the debt, as well as owning or investing their clients’
money in shares of CCA and GEO Group, these banks are complicit with the private prison
companies in profiting from incarceration.
The following subsections review the ways banks profit from extending revolving credit to
CCA and GEO Group, providing the private prison companies with term loans, underwriting
the private companies’ bonds, and owning the private prison companies’ stock.

*** The word “profit” in this section refers to generating revenue. It does not necessarily refer to generating revenue in excess of expenses.

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Banks profit from private prison companies’ revolving
credit and term loans
Banks charge CCA and GEO Group different variable interest rates for each loan taken out
under the revolving credit.90 CCA and GEO Group have some choice over the metrics used
to calculate the interest rate, but generally speaking, it is the sum of two rates:

•	 A base rate based on the London Interbank Offered Rate (LIBOR), the federal funds
rate, the administrative agent’s prime rate, or other set rates. Banks will often set
the base rate using floors (e.g., if LIBOR falls below 0.75 percent, the base rate will
be set at 0.75 percent) or increasing the percentages of the set rates (e.g., the base
rate will be set at the federal funds rate plus 0.5 percent); 91 and

•	 An adjustable rate (called the “applicable margin”) based on the risk of the loan, as

determined by a ratio of debt-to-earnings. When CCA and GEO Group have a high
debt-to-earnings ratio, the applicable margin increases. When CCA and GEO Group
have a low debt-to-earnings ratio, the applicable margin decreases.92

When the amended credit agreement was signed in May 2016, GEO Group’s loans under its
revolving credit had an interest rate of LIBOR plus 2.25 percent.93 As of June 30, 2016, the
weighted average interest rate for CCA’s loans under its revolving credit was 2.0 percent.94
Banks use the above summation to set the interest rate for CCA’s term loan.95 Banks do not
use the summation to set the interest rate for GEO Group’s term loan, but rather set the
interest rate at a high base rate.96 As of June 30, 2016, the interest rate for CCA’s term loan
was 2.0 percent.97 GEO Group’s term loan has an interest rate of LIBOR plus 2.5 percent (with
a LIBOR floor of 0.75 percent).98
As of June 30, 2016, GEO Group paid a weighted average interest rate of 2.9 percent for debt
under its revolving credit and term loan.99
Banks that extend revolving credit to CCA and GEO Group charge the private prison
companies a fee if they do not use their entire line of credit. This annual “commitment fee”
is a percentage of the daily average unused credit, and it slides on a scale based on the
company’s ratio of debt-to-earnings. If CCA has a high debt-to-earnings ratio, the banks
charge CCA a commitment fee of 0.40 percent.100 If CCA has a low debt-to-earnings ratio,
the banks charge CCA a commitment fee of 0.25 percent.101 Banks charge GEO Group a
commitment fee of 0.30 percent for a high debt-to-earnings ratio and 0.25 percent for a low
debt-to-earnings ratio.102 The dollar values of the commitment fees are unknown because,
to the best of In the Public Interest’s knowledge, the average daily unused credit
is unknown.
Banks also charge CCA and GEO Group a fee, called a “commission,” for writing letters
of credit.103 In CCA’s case, the commission is equal to a small percentage of the amount
available to CCA under the letter. The percentage, which is determined by the applicable
margin, varies between 1 percent and 1.75 percent.104

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The banks that are the administrative agents for CCA’s and GEO Group’s revolving credit—
Bank of America and BNP Paribas, respectively—charge the private prison companies
fees for fulfilling the administrative duties. Details on these fees are outlined in “fee letters”
between CCA and GEO Group and their administrative agents, which, to the best of In the
Public Interest’s knowledge, are not available to the public.105

Banks profit from private prison companies’ bonds	
The syndicate of banks that underwrite the bonds for CCA and GEO Group charge the
companies commissions, called “underwriting discounts,” for finding investors and reselling
the bonds to them. To resell CCA’s 5.0% bonds totaling $250 million, the underwriting
banks charged CCA $1.9 million, which is 0.75 percent of each note. (See Table 11.) To resell
GEO Group’s 6.0% bonds totaling $350 million and 5.875% bonds totaling $250 million, the
underwriting banks charged GEO Group $5.25 million and $3.75 million respectively, which
is 1.5 percent of each note. (See Tables 12 and 13.)
Table 11: The banks that underwrote CCA’s 5.0% bonds (totaling $250 million) collected over a
million dollars in commission106
Bank

Underwriting
Discount

Wells Fargo

$318,750

Merrill Lynch (owned by Bank of America)

$300,000

JPMorgan Chase

$300,000

SunTrust

$300,000

PNC

$182,813

U.S. Bancorp

$164,063

Regions

$150,000

RBS

$93,750

FTN (owned by First Tennessee)

$46,875

Macquarie Capital

$18,750

Total

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$1,875,000

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Table 12: The banks that underwrote GEO Group’s 6.0% bonds (totaling $350 million) collected
millions of dollars in commission107
Bank

Underwriting
Discount

Wells Fargo

$1,050,000

SunTrust

$1,050,000

Merrill Lynch (owned by Bank of America)

$735,000

Barclays

$735,000

JPMorgan Chase

$630,000

BNP Paribas

$367,500

HSBC

$210,000

Fifth Third

$157,500

Regions

$157,500

TD

$157,500

Total

$5,250,000

Table 13: The banks that underwrote GEO Group’s 5.875% bonds (totaling $250 million)
collected millions of dollars in commission108
Bank

Underwriting
Discount

Merrill Lynch (owned by Bank of America)

$721,875

Barclays

$721,875

SunTrust

$656,250

JPMorgan Chase

$468,750

Wells Fargo

$468,750

BNP Paribas

$281,250

HSBC

$281,250

TD

$150,000

Total

$3,750,000

The banks that are the trustees for CCA’s and GEO Group’s bonds—U.S. Bancorp and Wells
Fargo, respectively—charge the private prison companies fees for fulfilling the trustee’s
duties.109 To the best of In the Public Interest’s knowledge, details on these fees are not
available to the public.

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The entities that hold CCA’s and GEO Group’s bonds collect between 4.125 percent and 6.0
percent in interest. Over the lifetime of CCA’s $925 million of bonds, the company will pay
bondholders an estimated $346 million in interest. (See Table 14.) Over the lifetime of GEO Group’s
$1.15 billion of bonds, the company will pay bondholders an estimated $633 million in interest.
(See Table 15.)

Table 14: CCA’s bondholders collect hundreds of millions of dollars in interest110
Value of Bond
Offering
(millions)

Total

Interest Rate

Issue Date

Due Date

Estimated Total
Interest Payments
(millions)

$350

4.625%

April 2013

May 2023

$163

$325

4.125%

April 2013

April 2020

$94

$250

5.00%

September
2015

October
2022

$89

$925

$346

Table 15: GEO Group’s bondholders collect hundreds of millions of dollars in interest111
Value of Bond
Offering
(millions)

Total

Interest Rate

Issue Date

Due Date

Estimated Total
Interest Payments
(millions)

$300

5.125%

March 2013

April 2023

$154

$250

5.875%

October
2013

January
2022

$121

$250

5.875%

September
2014

October
2024

$148

$350

6.0%

April 2016

April 2026

$210

$1,150

$633

Banks profit from private prison companies’ stock
Bank of America, JPMorgan Chase, Wells Fargo, and U.S. Bancorp, which play large roles in CCA’s
and GEO Group’s debt financing, also own the private prison companies’ stock or invest in the
stock on behalf of their clients. (See Appendix A for how the banks are involved with CCA’s and GEO Group’s debts.)
These banks first profit from the interest and fees they collect from CCA’s and GEO Group’s debt,
and then can profit again or reap other benefits if the investments CCA and GEO Group make
with the debt cause stock prices to rise or generate dividends. Most notably, as of June 30, 2016,
Bank of America owned 7 percent, or $291 million, of CCA’s total shares. (See Table 16.)

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Table 16: Wall Street banks own stock in private prison companies (as of 30 June 2016)112
CCA
Value of
Shares
Invested

(thousands)

Number
of Shares
Invested

$290,953

8,308,227

JPMorgan
Chase

$17,958

Wells
Fargo

Bank

Bank of
America

U.S.
Bancorp
Total

GEO Group
Value of
Shares
Invested

(thousands)

Number
of Shares
Invested

7.07%

$14,778

432,363

0.58%

512,799

0.44%

$18,588

543,819

0.73%

$24,671

704,506

0.60%

$16,294

476,691

0.64%

$652

18,639

0.02%

$430

12,595

0.02%

$334,234

9,544,171

8.12%

$50,090

1,465,468

1.95%

Percent of
All Shares

Percent of
All Shares

Note: Shares in this table include those held by their clients. The Department of Justice’s announcement in August 2016 to end its
contracts with private prison companies caused CCA’s and GEO Group’s stock values to fall from the values listed in this table.113

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SEC TI ON 6

Banks should cease financing private prison
companies’ debts

M

ass incarceration and the criminalization of immigration in the United States have
both resulted from and exacerbated economic, racial, and political inequality. Forprofit incarceration amplifies these inequalities by creating a perverse incentive for private
prison companies to make business decisions that lead to more people behind bars.
Private prison companies depend on debt financing to conduct their day-to-day operations
and expand their control of the criminal justice and immigration enforcement systems. Both
CCA and GEO Group have acknowledged that their ability to obtain debt financing is critical
to maintaining profitability.114
The banks in this report should cease extending revolving credit, awarding term loans, and
underwriting bonds for private prison companies and end any existing agreements with the
companies as immediately and fully as the law allows. Considering CCA’s and GEO Group’s
high levels of debt ($1.5 billion and $1.9 billion, respectively) and low cash flows remaining
after dividend payments (approximately $39 million and $81 million, respectively for 2016),
the private prison companies are unlikely to have the cash on hand to repay their debts
when they come due.115 If the banks are unwilling to provide CCA and GEO Group with
access to new debt financing to pay back the old debt, the private prison companies will be
forced to find other sources of funds, which would significantly disrupt their operations and
growth.
Cutting off CCA’s and GEO Group’s access to debt financing would not only impact CCA’s
and GEO Group’s businesses, allowing the public to retake control and create more just
and moral criminal justice and immigration enforcement systems, but also could align
with the banks’ bottom line and existing protocols. Banks face growing reputational
risks for continuing to service the private prison industry. Further, restricting or ceasing
these relationships is consistent with these banks’ existing corporate social responsibility
commitments, and in line with due diligence procedures of the United Nations Guiding
Principles on Business and Human Rights.
Until banks choose to do so, their clients and shareholders should cease their own
complicity in indirectly supporting the private prison industry and exert pressure on the
banks to discontinue providing CCA and GEO Group with debt financing. Not only could
exerting pressure on the banks impact CCA’s and GEO Group’s reputation and operations (if
the banks decide to take action), but the pressure could match the clients’ and shareholders’
priorities as well. Endowments, churches, universities and socially responsible investors
that are clients and shareholders of these banks may better align their investments with
their missions by engaging banks on this issue. Municipalities and states that are clients

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and shareholders of these banks are increasingly aware of the costs of doing business with
private prison companies as evidenced by the cancelling of contracts. Pension funds that
are clients and shareholders of these banks may well serve their pensioners by guiding the
banks away from an industry that poses a growing reputational risk to all those involved.
Endowments, churches, universities, socially responsible investors, municipalities, states,
pension funds and other clients and shareholders can use tools ranging from shareholder
resolutions and engagement to divestment, according to the laws of their jurisdiction. They
can encourage banks to adopt contractual language in lending agreements to limit their
exposure to the prison industry. Likewise, asset owners can adopt investing policies and
proxy voting guidelines consistent with these efforts. Such policies and guidelines can flow
down to their asset managers who also have relationships with the financial institutions
discussed here.
With a successful, concerted effort, CCA and GEO Group will be unable to use debt financing
and continue contributing to and enabling mass incarceration and the criminalization of
immigration.

Many companies profit from incarceration
This report focuses on CCA and GEO Group because they are the country’s two largest
private prison companies and, since they are publicly traded, many data on their debts are
publicly available. However, other companies that operate prisons or provide correctional
and immigration enforcement services—such as health care, food, money transfer,
commissary, probation, prisoner transportation, and prisoner phone and video calls—
likely rely on debt financing as well.116 Much has been written about how these companies,
to maximize profits, extort and abuse prisoners, exacerbating mass incarceration and the
criminalization of immigration.117
Banks considering whether to cease their involvement with CCA and GEO Group should
also consider whether to cease their involvement with the other companies that provide
services to the criminal justice and immigration enforcement systems. Similarly, clients
and shareholders of banks should explore the degree to which their banks support these
other companies and consider exerting pressure on the banks to cease financing these
companies’ debts.

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SEC TI ON 7

Methodology and list of sources

I

n the Public Interest researchers analyzed CCA’s and GEO Group’s filings in the U.S. Security
and Exchange Commission’s (SEC) EDGAR database to collect information on the private
prison companies’ debts.
Researchers used CCA’s and GEO Group’s quarterly reports (10-Q) for the period ended 30
June 2016 and annual reports (10-K) for years 2007-2015 to determine which debts the
companies held and some details on the debts. Both the quarterly and annual reports have
sections that discuss debts.
Researchers also analyzed debt agreements and other pertinent filings for each revolving
credit facility, term loan, and bond offering, which are exhibits of current forms (8-K). To locate
these current forms, researchers used the exhibits filed as part of the annual reports, which
referenced the date each current form was filed that had an exhibit with a filling on debt.
Researchers also located the prospectuses for CCA’s and GEO Group’s bond offerings by
conducting a search for CCA’s and GEO Group’s 424 forms in the EDGAR database.

List of SEC filings used as sources
CCA’s and GEO Group’s filings related to their debts are listed below. The filings are listed by
date so they can be located in the EDGAR database.

CCA’s revolving credit and term loan fillings

•	 6 October 2015: Third Amendment and Incremental Term Loan Agreement
•	 22 July 2015: Second Amendment to Amended and Restated Credit Agreement
•	 22 March 2013: First Amendment to Amended and Restated Credit Agreement
•	 6 January 2012: Amended and Restated Credit Agreement
•	 19 May 2009: Amendment No. 1 to Credit Agreement
•	 21 December 2007: Credit Agreement
•	 3 February 2006: Credit Agreement
CCA’s bond filings

•	 5.00% bonds due 2022 ($250 million)

•	 15 May 2015: Prospectus Supplement (includes Prospectus)
•	 21 September 2015: Underwriting Agreement
•	 21 September 2015: press release
•	 25 September 2015: Indenture
•	 25 September 2015: First Supplemental Indenture

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•	 4.125% bonds due 2020 ($325 million)
•	 4 April 2013: Indenture

•	 4 April 2013: Registration Rights Agreement
•	 4 April 2013: press release

•	 4.625% bonds due 2023 ($350 million)
•	 4 April 2013: Indenture

•	 4 April 2013: Registration Rights Agreement
•	 4 April 2013: press release

•	 7.75% bonds due 2017 ($465 million)

•	 19 May 2009: Prospectus Supplement (includes Prospectus)
•	 19 May 2009: Underwriting Agreement
•	 19 May 2009: press release

•	 6.75% bonds due 2014 ($150 million)

•	 17 January 2006: Prospectus Supplement (includes Prospectus)
•	 18 January 2006: Underwriting Agreement
•	 23 January 2006: First Supplemental Indenture

•	 6.25% bonds due 2013 ($375 million)

•	 8 March 2005: Purchase Agreement
•	 23 March 2005: Indenture
•	 23 March 2005: Registration Rights Agreement
•	 23 March 2005: press release

•	 7.50% bonds due 2011 (two offerings: $200 million and $250 million)
•	 30 April 2003: Prospectus Supplement (includes Prospectus)
•	 7 May 2003: Supplemental Indenture
•	 8 August 2003: Second Supplement

GEO Group’s revolving credit and term loan filings

•	 19 May 2016: Amendment No. 1 to Second Amended and Restated
Credit Agreement

•	 27 August 2014: Second Amended and Restated Credit Agreement
•	 3 April 2013: Amended and Restated Credit Agreement
•	 30 August 2012: Series A-3 Incremental Loan Agreement
•	 30 August 2012: Amendment No. 3 (to the Credit Agreement)
•	 2 May 2011: Amendment No. 2 (to the Credit Agreement)
•	 8 February 2011: Amendment No. 1 (to the Credit Agreement)
•	 4 August 2010: Credit Agreement
•	 4 December 2009: Amendment No. 7 (to the Third Amended and Restated
Credit Agreement)

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•	 14 October 2009: Amendment No. 6 (to the Third Amended and Restated
Credit Agreement)

•	 5 October 2009: Amendment No. 5 (to the Third Amended and Restated
Credit Agreement)

•	 26 August 2008: Amendment No. 4 (to the Third Amended and Restated
Credit Agreement)

•	 2 May 2007: Amendment No. 3 (to the Third Amended and Restated
Credit Agreement)

•	 13 February 2007: Amendment No. 2 (to the Third Amended and Restated
Credit Agreement)

•	 31 January 2007: Amendment No. 1 (to the Third Amended and Restated
Credit Agreement)

•	 24 January 2007: Third Amended and Restated Credit Agreement
GEO Group’s bond filings

•	 6.00% bonds due 2026 ($350 million)
•	 11 April 2016: Prospectus Supplement (includes Prospectus)
•	 18 April 2016: Second Supplemental Indenture
•	 18 April 2016: press release

•	 5.875% bonds due 2024 ($250 million)

•	 22 September 2014: Prospectus Supplement (includes Prospectus)
•	 22 September 2014: Underwriting Agreement
•	 25 September 2014: First Supplemental Indenture
•	 25 September 2014: press release

•	 5.125% bonds due 2023 ($300 million)

•	 19 March 2013: Registration Rights Agreement
•	 19 March 2013: Indenture
•	 20 March 2013: press release

•	 6.625% bonds due 2021 ($300 million)

•	 10 February 2011: Registration Rights Agreement
•	 10 February 2011: Indenture
•	 11 February 2011: press release

•	 7.75% bonds due 2017 ($250 million)

•	 20 October 2009: Registration Rights Agreement
•	 20 October 2009: Indenture
•	 20 October 2009: press release

•	 8.25% bonds due 2013 ($150 million)
•	 1 July 2003: Purchase Agreement

•	 9 July 2003: Registration Rights Agreement
•	 9 July 2003: Indenture
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List of bank names in this report
This report presents data on the banks’ involvement in prison companies’ debt using the
banks’ commonly used names instead of their incorporated names. For example, this report
uses “Bank of America” instead of “Bank of America Corporation.” Additionally, the banks
often finance prison companies’ debts through the banks’ subsidiaries. This report presents
this information using the commonly used names of the parent company instead of the
names of the subsidiaries. The bullets below are the commonly used names of the banks
used in this report. The first set of sub-bullets is names of the parent bank. The second
set of sub-bullets is names of banks’ subsidiaries that are involved with CCA’s and GEO
Group’s debts. In the Public Interest researchers collected this information from banks’ list of
subsidiaries filed with the SEC as exhibits of their annual reports (10-K).

•	 Avondale Partners (name used in report)

•	 Avondale Group, LLC (parent company)
•	 Avondale Partners, LLC (subsidiary)

•	 Bank of America (name used in report)

•	 Bank of America Corporation (parent company)
•	 Bank of America, N.A. (subsidiary)
•	 Merrill Lynch, Pierce, Fenner & Smith Incorporated – shortened to “Merrill
Lynch” in the report (subsidiary)

•	 Barclays (name used in report)

•	 Barclays Bank PLC (parent company)
•	 Barclays Capital Inc. (subsidiary)

•	 BB&T (name used in report)

•	 BB&T Corporation (parent company)
•	 BB&T Capital Markets (subsidiary)

•	 BNP Paribas (name used in report)

•	 BNP Paribas (parent company)
•	 BNP Paribas Securities Corp (subsidiary)

•	 Canaccord Genuity (name used in report)

•	 Canaccord Genuity Group Inc. (parent company)

•	 Citizens Bank of Pennsylvania (name used in report)
•	 Citizens Financial Group, Inc. (parent company)
•	 Citizens Bank of Pennsylvania (subsidiary)

•	 Fifth Third (name used in report)

•	 Fifth Third Bancorp (parent company)
•	 Fifth Third Securities, Inc. (subsidiary)

•	 First Tennessee (name used in report)

•	 First Horizon National Corporation (parent company)
•	 First Tennessee Bank, National Association (subsidiary)
•	 FTN Financial Securities Corp. (subsidiary)

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•	 HSBC (name used in report)

•	 HSBC Finance Corporation (parent company)
•	 HSBC Securities (USA) Inc. (subsidiary)

•	 JPMorgan Chase (name used in report)

•	 JPMorgan Chase & Co. (parent company)
•	 JPMorgan Chase Bank, N.A. (subsidiary)
•	 J.P. Morgan Securities LLC (subsidiary)

•	 Macquarie Capital (name used in report)

•	 Macquarie Group Limited
•	 Macquarie Capital (USA) Inc. (subsidiary)

•	 Pinnacle (name used in report)

•	 Pinnacle Bancorp Inc. (parent company)
•	 Pinnacle Bank (subsidiary)

•	 PNC (name used in report)

•	 The PNC Financial Services Group, Inc. (parent company)
•	 PNC Bank, National Association (subsidiary)
•	 PNC Capital Markets, LLC (subsidiary)

•	 RBS (name used in report)

•	 The Royal Bank of Scotland Group PLC (parent company)
•	 RBS Securities Inc. (subsidiary)

•	 Regions (name used in report)

•	 Regions Financial Corporation (parent company)
•	 Regions Bank (subsidiaries)
•	 Regions Securities LLC (subsidiary)

•	 SunTrust (name used in report)

•	 SunTrust Banks, Inc. (parent company)
•	 SunTrust Bank (subsidiary)
•	 SunTrust Robinson Humphrey, Inc. (subsidiary)

•	 TD (name used in report)

•	 The Toronto-Dominion Bank (parent company)
•	 TD Securities (USA) LLC (subsidiary)

•	 U.S. Bancorp (name used in report)

•	 U.S. Bancorp (parent company)
•	 US Bancorp Investments, Inc (subsidiary)
•	 U.S. Bank National Association (subsidiary)

•	 Wells Fargo (name used in report)

•	 Wells Fargo & Company (parent company)
•	 Wells Fargo Bank, National Association (subsidiary)
•	 Wells Fargo Securities, LLC (subsidiary)

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AP PENDI X A

The six banks that play large roles in CCA’s
and GEO Group’s debts

O

ver the course of researching this report, six banks—Bank of America, JPMorgan
Chase, BNP Paribas, SunTrust, U.S. Bancorp, and Wells Fargo—stood out as playing
especially large roles in financing CCA’s and GEO Group’s debts. According to the data
available, these six banks extended larger lines of credit, gave larger term loans, and
underwrote more bonds than did other banks. These six banks also play key roles in the
agreements, such as being the administrative agent for revolving credit or the trustee for a
bond offering.
The following tables outline the involvement of these six banks in financing CCA’s and GEO
Group’s debts. Data come from an analysis of the sources in this report’s “Methodology and
List of Sources” section. The “Current Involvement” column lists the ways the banks have
allowed CCA and GEO Group to acquire debt through agreements that were active as of
June 2016. The “Past Involvement” column lists the ways the banks have allowed CCA and
GEO Group to acquire debt through agreements that were not active in June 2016, but have
been active at some time in the past 10 years (specifically, since January 24, 2007).
The tables provide a partial view of the six banks’ involvement. The data are not
comprehensive due to limited information in the records that CCA and GEO Group have
disclosed.
Each table includes the involvement of the subsidiaries of the parent company. For
example, instances in which Merrill Lynch has underwritten bonds are included in the table
on Bank of America because Merrill Lynch is owned by Bank of America.

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Table A-1: Bank of America’s role in CCA’s and GEO Group’s debts
Type of Debt

Current Involvement
• $64.8 million loan to CCA
• $132.5 million line of credit to CCA
• Administrative agent, swingline
lender, and issuing lender for the
syndicate of banks that has loaned
CCA $444 million and extended the
company a $900 million line of credit

Revolving
Credit

• Part of the syndicate of banks that has
loaned GEO Group $450 million and
extended the company a $900 million
line of credit

Past Involvement
• Extended a $118.8 million line of
credit to CCA in 2013
• Administrative agent, swingline
lender, and issuing lender for the
syndicate of banks that extended CCA
a $900 million line of credit in 2013
• Administrative agent, swingline
lender, and issuing lender for the
syndicate of banks that extended CCA
a $785 million line of credit in 2012
• Administrative agent, swingline
lender, and issuing lender for the
syndicate of banks that extended CCA
a $450 million line of credit in 2007
• Part of the syndicate of banks that
extended a $150 million line of credit
to CCA in 2006

• $14.3 million loan to CCA

Term Loans

• Unknown

• Administrative agent for the
syndicate of banks that has loaned
CCA $97.5 million
• Part of the syndicate of banks that has
loaned GEO Group $291 million

Bonds

• Underwrote $40 million of notes for
CCA’s offering in 2015

• Underwrote $105.8 million of notes for
CCA’s offering in 2009

• Part of a syndicate of banks that
underwrote $675 million notes for
CCA’s two offerings in 2013

• Underwrote $31.5 million of notes for
CCA’s offering in 2006

• Underwrote $49 million of notes for
GEO Group’s offering in 2016
• Underwrote $48.1 million of notes for
GEO Group’s offering in 2014

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• Part of the syndicate of banks that
underwrote CCA’s bond offering in
2005 totaling $375 million
• Part of the syndicate of banks that
underwrote GEO Group’s bond
offering in 2009 totaling $250 million

39

Table A-2: BNP Paribas’s Role in CCA’s and GEO Group’s Debts
Type of Debt

Current Involvement
• Administrative agent for the
syndicate of banks that has loaned
GEO Group $450 million and
extended the company a $900
million line of credit

Revolving
Credit

Past Involvement
• Administrative agent for the
syndicate of banks that extended
a $700 million line of credit to GEO
Group in 2013
• Administrative agent for the
syndicate of banks that extended
a $400 million line of credit to GEO
Group in 2010
• Administrative agent for the
syndicate of banks that extended
a $150 million line of credit to GEO
Group in 2007

Term Loans

• Administrative agent for the
syndicate of banks that has loaned
GEO Group $291 million

• Administrative agent for the
syndicate of banks that loaned GEO
Group $365 million in 2007

• Underwrote $24.5 million of notes
for GEO Group’s offering in 2016

Bonds

• Administrative agent for the
syndicate of banks that loaned GEO
Group $350 million in 2010

• Underwrote $18.8 million of notes
for GEO Group’s offering in 2014

inthepublicinterest.org  |  The Banks That Finance Private Prison Companies	

• Part of the syndicate of banks that
underwrote GEO Group’s bond
offering in 2009 totaling $250 million
• Part of the syndicate of banks that
underwrote GEO Group’s bond
offering in 2003 totaling $150 million

40

Table A-3: JPMorgan Chase’s Role in CCA’s and GEO Group’s Debts
Type of Debt

Current Involvement
• $64.8 million loan to CCA
• $132.5 million line of credit to CCA

Revolving
Credit

• Part of the syndicate of banks that
has loaned GEO Group $450 million
and extended the company a $900
million line of credit

Past Involvement
• Extended a $118.8 million line of
credit to CCA in 2013
• Part of the syndicate of banks that
extended a $785 million line of
credit to CCA in 2012
• Part of the syndicate of banks that
extended a $450 million line of
credit to CCA in 2007
• Part of the syndicate of banks that
extended a $150 million line of
credit to CCA in 2006

Term
Loans

Bonds

• $14.3 million loan to CCA

• Unknown

• Underwrote $40 million of notes
for CCA’s offering in 2015

• Underwrote $105.8 million of
notes for CCA’s offering in 2009

• Part of a syndicate of banks that
underwrote $675 million notes for
CCA’s two offerings in 2013

• Underwrote $15 million of notes
for CCA’s offering in 2006

• Underwrote $42 million of notes
for GEO Group’s offering in 2016
• Underwrote $31.3 million of notes
for GEO Group’s offering in 2014
• Holds $89 million of CCA’s bonds
(as of 14 October 2016)

• Part of the syndicate of banks that
underwrote CCA’s bond offering in
2005 totaling $375 million
• Part of the syndicate of banks that
underwrote GEO Group’s bond
offering in 2011 totaling $300
million

• Holds $77 million of GEO Group’s
bonds (as of 14 October 2016)

inthepublicinterest.org  |  The Banks That Finance Private Prison Companies	

41

Table A-4: SunTrust’s Role in CCA’s and GEO Group’s Debts
Type of Debt

Current Involvement
• $64.8 million loan to CCA
• $132.5 million line of credit to CCA
• Part of the syndicate of banks that
has loaned GEO Group $450 million
and extended the company a $900
million line of credit

Revolving
Credit

Past Involvement
• Extended a $118.8 million line of
credit to CCA in 2013
• Part of the syndicate of banks that
extended a $785 million line of
credit to CCA in 2012
• Part of the syndicate of banks that
extended a $450 million line of
credit to CCA in 2007
• Part of the syndicate of banks that
extended a $150 million line of
credit to CCA in 2006
• Part of the syndicate of banks that
extended a $700 million line of
credit to GEO Group in 2013

Term
Loans

Bonds

• $14.3 million loan to CCA

• Unknown

• Part of the syndicate of banks that
has loaned GEO Group $291 million

• Underwrote $40 million of notes
for CCA’s offering in 2015

• Underwrote $38.9 million of notes
for CCA’s offering in 2009

• Part of a syndicate of banks that
underwrote $675 million notes for
CCA’s two offerings in 2013

• Underwrote $6.8 million of notes
for CCA’s offering in 2006

• Underwrote $70 million of notes
for GEO Group’s offering in 2016
• Underwrote $43.8 million of notes
for GEO Group’s offering in 2014

inthepublicinterest.org  |  The Banks That Finance Private Prison Companies	

• Part of the syndicate of banks that
underwrote GEO Group’s bond
offering in 2011 totaling $300
million
• Part of the syndicate of banks that
underwrote GEO Group’s bond
offering in 2009 totaling $250
million

42

Table A-5: U.S. Bancorp’s role in CCA’s and GEO Group’s Debts
Type of Debt

Current Involvement
• $39.1 million loan to CCA

Past Involvement
• Extended a $80 million line of
credit to CCA in 2013

Revolving
Credit

• $80 million line of credit to CCA

Term Loans

• Unknown

• Unknown

• Trustee for CCA’s bond offering in
2015 totaling $250 million

• Trustee for CCA’s bond offering in
2009 totaling $465 million

• Underwrote $21.9 million of notes
for CCA’s bond offering in 2015

• Trustee for CCA’s bond offering in
2006 totaling $150 million

• Trustee for CCA’s two bond
offerings in 2013 totaling $675
million

• Trustee for CCA’s bond offering in
2005 totaling $375 million

Bonds

• Part of the syndicate of banks that
extended a $785 million line of
credit to CCA in 2012

inthepublicinterest.org  |  The Banks That Finance Private Prison Companies	

• Trustee for CCA’s two bond
offerings in 2003 totaling $450
million

43

Table A-6: Wells Fargo’s role in CCA’s and GEO Group’s Debts
Type of Debt

Current Involvement
• $64.8 million loan to CCA
• $132.5 million line of credit to CCA
• Issuing lender for CCA
• Part of the syndicate of banks
that has loaned GEO Group $450
million and extended the company
a $900 million line of credit

Past Involvement
• Extended a $118.8 million line of
credit to CCA in 2013
• Part of the syndicate of banks that
extended a $785 million line of
credit to CCA in 2012
• Issuing lender for CCA’s revolving
credit issued in 2012 and 2013
• Part of the syndicate of banks that
extended a $450 million line of
credit to CCA in 2007*

Revolving
Credit

• Administrative agent, swingline
lender, and issuing lender for the
syndicate of banks that extended
CCA a $150 million line of credit
in 2006*
• Part of the syndicate of banks that
extended a $700 million line of
credit to GEO Group in 2013

• $14.3 million loan to CCA

Term Loans

• Resold $42.5 million of notes as
the largest underwriter for CCA’s
offering in 2015
• Part of a syndicate of banks that
underwrote $675 million notes for
CCA’s two offerings in 2013

Bonds

• Unknown

• Part of the syndicate of banks
that has loaned GEO Group $291
million

• Underwrote $70 million of notes
for GEO Group’s offering in 2016
• Underwrote $31.3 million of notes
for GEO Group’s offering in 2014
• Trustee for all four of GEO Group’s
bond offerings
• Holds $9.4 million of GEO Group’s
bonds (as of 14 October 2016)

• Underwrote $105.8 million of
notes for CCA’s offering in 2009*
• Underwrote $31.5 million of notes
for CCA’s offering in 2006*
• Part of the syndicate of banks that
underwrote CCA’s bond offering in
2005 totaling $375 million*
• Trustee for GEO Group’s bond
offering in 2011 totaling $300
million
• Trustee for GEO Group’s bond
offering in 2009 totaling $250
million

Note: an asterisk denotes instances in which Wachovia extended the line of credit or underwrote the bonds. In 2008, Wells Fargo purchased
Wachovia and assumed its obligations in regard to debt.118

inthepublicinterest.org  |  The Banks That Finance Private Prison Companies	

44

AP PENDI X B

The banks that financed CCA’s and GEO Group’s
acquisitions of smaller companies
GEO Group relied on loans to finance the acquisition of eight of the nine companies purchased
since 2005. CCA did not purchase any companies from 2005 to 2012, but since 2013, has acquired
three companies, with two of the acquisitions being financed with debt.
The two tables below—one for GEO Group and one for CCA—list the banks involved in financing
the private prison companies’ acquisitions of other companies.
For acquisitions that were financed with revolving credit, the “Banks Involved” column lists banks
that extended lines of credit or were the administrative agent. For acquisitions that were financed
through a term loan, the “Banks Involved” column lists banks that provided term loans or were
the administrative agent. For acquisitions that were financed through bonds, the “Banks Involved”
column lists banks that underwrote the bonds or were the trustee for the offering.
To purchase some companies, GEO Group supplemented the debt with cash on hand. For
example, GEO Group purchased CentraCore Properties Trust with $365 million from a term loan
and $63 million in cash on hand.119 While CCA’s press releases state that the company used cash
from its revolving credit for its acquisitions, CCA might have supplemented the debt with cash
on hand.
To the best of In the Public Interest’s knowledge, GEO Group’s filings with the SEC do not show that
it purchased Protocol Criminal Justice with debt financing. Protocol Criminal Justice is included
in the table below with “NA” in the relevant cells. CCA’s filings with the SEC show that it did not
purchase Correctional Alternatives with debt financing. Correctional Alternatives is included in the
tables below with an explanation in the relevant cells.
Data for the “Year,”“Service,”“Purchase Price,” and “Type of Debt Used to Finance the Acquisition”
come from the source or sources in the endnote attached to each company’s name. The
“Banks Involved” in each purchase were determined by reviewing CCA’s and GEO Group’s debt
agreements that were active when the company was purchased. For a list of debt agreements,
see the “Methodology and list of sources” section.

inthepublicinterest.org  |  The Banks That Finance Private Prison Companies	

45

Table B-1: The banks that financed GEO Group’s acquisition of smaller companies
Year

Company
Acquired

Service

Purchase Type of Debt Used
Price
to Finance the
(millions)
Acquisition

Soberlink,
Inc.120

Alcohol
monitoring

$24

1.	Revolving
credit

1.	BNP Paribas
(administrative agent)
2.	Bank of America
3.	Barclays
4.	SunTrust
5.	 Wells Fargo

LCS Corrections
Services, Inc.121

Facility
operations

$307

1.	Revolving
credit

1.	BNP Paribas
(administrative agent)
2.	Bank of America
3.	Barclays
4.	SunTrust
5.	Wells Fargo

Protocol
Criminal
Justice, Inc.122

Call center
and case
management
services for
electronic
monitoring

$13

NA

NA

Municipal
Corrections
Finance L.P.123

Facility
owner

$27

1.	Term loan

1.	BNP Paribas
(administrative agent)

BI Holding
Corporation124

Electronic
monitoring

1.	Term loan –
$150.0 million

Term loan:
1.	BNP Paribas
(administrative agent)

2.	Bonds –
93.3 million125

Bonds:
2.	Wells Fargo (trustee)
3.	Merrill Lynch (owned
by
Bank of America)
4.	Barclays
5.	J.P. Morgan
6.	SunTrust Robinson
Humphrey

1.	Revolving
credit

1.	BNP Paribas
(administrative agent)

2015

2015

2014

2012

$415

2011

Cornell
Companies,
Inc.126

Facility
operations

Just Care,
Inc.128

Medical/
mental
health care

2007

CentraCore
Properties
Trust129

Facility owner

2005

Correctional
Services
Corporation130

Facility
operations

2010

Banks Involved

2009

$685127

2.	Term loan
$38

1.	Revolving
credit

1.	BNP Paribas
(administrative agent)
2.	Bank of America
(syndication agent)
3.	Wells Fargo
(documentation
agent)

$428

1.	Term loan

1.	BNP Paribas
(administrative agent)

$62

1.	Term loan

1.	BNP Paribas
(administrative agent)
2.	Bank of America
(syndication agent)

inthepublicinterest.org  |  The Banks That Finance Private Prison Companies	

46

Table B-2: The banks that financed CCA’s acquisition of smaller companies

Year

Purchase
Type of Debt
Price
Used to Finance
(millions)
Acquisition

Company
Acquired

Service

Correctional
Management,
Inc.131

Residential
reentry
centers

$35

1.	Revolving
credit

1.	 Bank of America
(administrative
agent)
2.	 Wells Fargo
3.	 SunTrust
4.	 JPMorgan Chase
5.	 PNC
6.	 U.S. Bank
7.	 Regions Bank
8.	 Citizens Bank of
Pennsylvania
9.	 First Tennessee
Bank
10.	Pinnacle Bank

Avalon
Correctional
Services, Inc.132

Residential
reentry
centers

$158

1.	Revolving
credit

1.	 Bank of America
(administrative
agent)
2.	 Wells Fargo
3.	 SunTrust
4.	 JPMorgan Chase
5.	 PNC
6.	 U.S. Bank
7.	 Regions Bank
8.	 Citizens Bank of
Pennsylvania
9.	 First Tennessee
Bank
10.	Pinnacle Bank

Correctional
Alternatives,
Inc.133

Residential
reentry
centers

$36

2016

2015

2013

inthepublicinterest.org  |  The Banks That Finance Private Prison Companies	

CCA did not
finance the
acquisition
with debt

Banks Involved

NA

47

REFERENC ES

Endnotes
Many of the facts in the body of this report are based on a close reading of the entire source
in the citation. The page numbers in the citations, when listed, should serve as guides and
starting points that provide some details on the content in the report’s body. Other details
can be found elsewhere in the source.
Many sources are amendments to debt agreements, which contain first the amendment
and then the debt agreement. For this reason, these sources have two sets of page
numbers—one set for the amendment and another set for the debt agreement. When
needed, the citations that reference these sources state whether the page number refers to
the amendment or original agreement.
1	 For more information, see In the Public Interest, “Closing the Books: How Government Contractors Hide Public Records,”
88	CCA’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 2 (“Interest expense, net”). Also see GEO Group’s Quarterly Report (Form
March
10-Q)
for 2015.
period ended 30 June 2016, page 3 (“Interest expense”).
2	 Newt Gingrich, “Newt Gingrich: Alabama Prison Reform Bill the ‘Right’ Thing to Do,” Right on Crime, 1 April 2015.
89	CCA’s Annual Report (Form 10-K) for fiscal year ended 31 December 2015, page 52 (“Interest expense, net”). Also see GEO Group’s Annual Report (Form
3	 10-K)
fiscal
year ended has
31 December
2015,
86 (“Interest
Expense”).
Jefffor
Guo,
“American
locked up
sopage
many
black people
it has warped our sense of reality,” The Washington Post, 26

February 2016.

4	
120	Ben Norton,
GEO“Scathing
Group’s Annual
(Form
10-K) for fiscal
year endures
ended 31 December
2015,
pages
108-109. Also
seefailed
Soberlink,
“How It Works,
”
U.N.Report
report:
‘Structural
racism’
in U.S., and
the
government
has
to protect
Africadownloaded
www.soberlink.com/mobile-alcohol-monitoring-breathalyzer/,
20 October 2016.
Americans’from
rights,
” Salon, 7 October 2016.
5	
121	In the Public
GEO Interest,
Group’s Current
(Form
8-K) from
25Tax
January
2015.Away
Also see
The GEO
Group,
“The GEOJustice
Group Announces
Acquisition of
“HowReport
Private
Prisons
Take
Dollars
from
Fixing
OurInc.,
Criminal
System,” downloaded
Eight
and Detention Facilities Totaling More than 6,500 Beds” (press release), 26 January 2015.
fromCorrectional
www.inthepublicinterest.org/how-private-prisons-take-tax-dollars-away-from-fixing-our-criminal-justice-system,
122	posted onBI,26
“BIFebruary
Incorporated
acquires
Protocol
Government
Solutions,” downloaded
bi.com/blog/industry-news/bi-incorporated-acquires2016.
While
Corrections
Corporation
of Americafrom
(CCA)
rebranded as “CoreCivic” on 28 October
protocol-government-solutions,
onthe
12 March
2014.
2016, this report continuesposted
to use
name
“CCA.” For more information see Corrections Corporation of America,

123	“Corrections
The Corporation
GEO Group Inc.,of
“The
GEO Group
Signs Agreement
to Purchase
100%
Interest 28
in Municipal
America
Rebrands
as CoreCivic”
(press
release),
OctoberCorrections
2016. Finance, L.P. for $27 Million”
6	 (press
7 May 2012.
Also seeAnnual
GEO Group’s
Annual
Report
fiscal year ended
31 December
2012, page“Form
5.
The release),
GEO Group,
Inc., “2015
Report,
” page
28.(Form
Also10-K)
see for
Corrections
Corporation
of America,
10-K,” for fiscal

124	year ended
GEO
Annual2015,
Reportpage
(Form3.
10-K) for fiscal year ended 2 January 2011, pages 4 and 67. Also see The GEO Group, Inc., “The GEO
31Group’s
December
Announces $415 Million Acquisition of B.I. Incorporated” (press release), 21 December 2010. The value of the
7	 Group
Michael Konczal, “Frenzied Financialization,” Washington Monthly, November/December 2014.
125	
The sum of $150 million (the value of the term loan) and $293.3 million (the value of the bonds) is greater than $415 million (the
8	
Debbie Gruenstein
Wei Li,
and Keith
Ernst,
Center
forfrom
Responsible
Lending,
byInc.
Race and Ethnicity:
acquisition
cost of B.I. Inc.).Bocian,
One possible
explanation
is that
not all
proceeds
the bond offering
were“Foreclosures
used to acquire B.I.

The Demographics of a Crisis,” 18 June 2010.

126	
The GEO Group, Inc., “The GEO Group and Cornell Companies Announce $685 Million Merger,” 19 April 2010. Also see GEO Group’s Annual
9	 Kailey Martinez-Ramage, “Berkeley City Council approves resolution to divest from private prisons,” The Daily Californian,
Report (Form 10-K) for fiscal year ended 2 January 2011, page 5.

127	26 July 2016.
The GEO Group, Inc., “The GEO Group and Cornell Companies Announce $685 Million Merger,” 19 April 2010.
10	 In the Public interest, “Corrections Corporation of America’s Troubling Track Record,” 23 February 2016. Also see American
128	
GEO Group’s Annual Report (Form 10-K) for fiscal year ended 3 January 2010, page 4. Also see The GEO Group, Inc., “The GEO Group Closes
Friends Service
Committee,
“Investigate:
The
GEO Group Inc.,” downloaded from investigate.afsc.org/company/geoAcquisition
of Just Care,
Inc.” (press release),
1 October
2009.

6 November
2016.
Also
see10-K)
American
Liberties
Union, “Warehoused
and
Immigrants
Trapped
129	group-inc,GEO
Group’s Annual
Report
(Form
for fiscalCivil
year ended
31 December
2006, Page 4. Also
see Forgotten:
The GEO Group,
Inc., “The GEO
Group,
in Our
Private
Prison Properties
System,”Trust”
June(press
2014.release), 24 January 2007.
Inc.
ClosesShadow
Acquisition
of CentraCore
11	 Donald Cohen, “It’s a crime: How private prison companies encourage mass incarceration,” Salon, 26 June 2016.
130	
The GEO Group, Inc., “The GEO Group, Inc. Announces Closing of Acquisition of Correctional Services Corporation; Divests Juvenile
12	Services
(press release),
7 November
2005. Companies Increase Recidivism,” June 2016.
In theDivision”
Public Interest,
“How
Private Prison
13	
131	Anita Mukherjee,
Corrections
Corporation
of America,
“CCA Acquires
Correctional
Inc.” (press
11 April” 15
2016.
“Do
Private Prisons
Distort
Justice?
EvidenceManagement,
on Time Served
andrelease),
Recidivism,
March 2015.
14	
132	In the Public
Corrections
Corporation
America, “CCA
Announces
Acquisition
of Avalon
Correctional
Inc.” (press
release), 29
October
2015.
Interest,
“CuttingofCorners
in America’s
Criminal
Justice
System:
How Services,
Corrections
Companies
Harm
Prisons
133	and PublicCorrections
America,
“CCA Acquires Correctional Alternatives, Inc.” (press release), 5 August 2013.
in PursuitCorporation
of Profit,”ofApril
2016.
15	
1	 For
information,
see In“Private
the PublicPrison
Interest,CEOs
“Closing
the Books:
Government
Contractors
HideCorrectional
Public Records,Officers
” 10 Marchthat
2015.Work for
In more
the Public
Interest,
Continue
toHow
Make
Much More
than the

Them,
” www.inthepublicinterest.org/private-prison-ceos-continue-to-make-much-more-than-the-correctional-officers2	 Newt
Gingrich,
“Newt Gingrich: Alabama Prison Reform Bill the ‘Right’ Thing to Do,” Right on Crime, 1 April 2015.
that-work-for-them,
on 6black
November
postedour
onsense
31 March
2016.
“22
percent” derived
from correctional
3	 Jeff
Guo, “American hasdownloaded
locked up so many
people 2016,
it has warped
of reality,
” The
Washington
Post, 26 February
2016.
officers’ median salary at private prisons ($32,290) and corrections officers’ median salary at public prisons ($41,160).
4	
Ben
Norton,
“Scathing
U.N.
report:
‘Structural
racism’
endures
in
U.S.,
and
the
government
has
failed
to
protect
Africa-Americans’
rights,”
16	 While Corrections Corporation of America (CCA) rebranded as “CoreCivic” on 28 October 2016, this report continues
to
Salon, 7 October 2016.
use
name
“CCA.“How
” For Private
more information
seeDollars
Corrections
Corporation
America,
“Corrections
Corporation
ofwww.
America
5	 In
thethe
Public
Interest,
Prisons Take Tax
Away from
Fixing Ourof
Criminal
Justice
System,” downloaded
from
Rebrands as CoreCivic” (press release), 28 October 2016.
inthepublicinterest.org/how-private-prisons-take-tax-dollars-away-from-fixing-our-criminal-justice-system,
posted on 26 February 2016.
17	 CCA: Quarterly Report (Form 10-Q) for period ended 30 June 2016, pages 14-15. 49 percent derived from dividing $444
While Corrections Corporation of America (CCA) rebranded as “CoreCivic” on 28 October 2016, this report continues to use the name
“CCA.
million
” For(outstanding
more information
debt)
seeby
Corrections
$900 million
Corporation
(revolving
of America,
credit limit).
“Corrections
GEO Group:
Corporation
Quarterly
of America
Report
Rebrands
(Form as
10-Q)
CoreCivic”
for period
(press
release),
28 October
2016.
ended 30
June 2016,
pages 18-20. 50 percent derived from dividing $450 million (outstanding debt) by $900 million

6	 The
GEO Group,
Inc., “2015
(revolving
credit
limit).Annual Report,” page 28. Also see Corrections Corporation of America, “Form 10-K,” for fiscal year ended 31 December 2015,
3.
18	page
CCA’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, pages 14-15.
7	 Michael Konczal, “Frenzied Financialization,” Washington Monthly, November/December 2014.
19	

CCA’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 14.

8	 Debbie Gruenstein Bocian, Wei Li, and Keith Ernst, Center for Responsible Lending, “Foreclosures by Race and Ethnicity: The Demographics of a Crisis,”
20	 CCA’s Second Amendment and Restated Credit Agreement, dated 27 August 2014, page 31.
18 June 2010.
21	 GEO Group’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, pages 18-19.
9	 Kailey Martinez-Ramage, “Berkeley City Council approves resolution to divest from private prisons,” The Daily Californian, 26 July 2016.
22	
10	InCCA:
the Public
interest,Report
“Corrections
Corporation
America’s
Troubling
February
2016.Group:
Also see Quarterly
American Friends
Service
Committee,
Quarterly
(Form
10-Q) forofperiod
ended
30Track
JuneRecord,
2016,” 23
page
14. GEO
Report
(Form
10-Q)

“Investigate:
GEO Group
Inc.,”2016,
downloaded
for periodThe
ended
30 June
page from
18. investigate.afsc.org/company/geo-group-inc, 6 November 2016. Also see American Civil Liberties
23	Union,
and Forgotten:
Immigrants
Trapped
in Our31
Shadow
Private Prison
JuneGEO
2014.Group: Annual Report (Form 10-K)
CCA:“Warehoused
Annual Report
(Form 10-K)
for period
ended
December
2015,System,
page”52.
11	Donald
Cohen,
“It’s a crime:
How private2015,
prisonpage
companies
for period
ended
31 December
86. encourage mass incarceration,” Salon, 26 June 2016.
24	 GEO Group’s Annual Report (Form 10-K) for period ended 31 December 2015, page 73.

inthepublicinterest.org  |  The Banks That Finance Private Prison Companies	

48

25	 CCA’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, pages 14-16. Also see CCA’s Annual Report (Form 10-

K) for period ended 31 December 2015, pages F-27 to F-29.

26	 GEO Group’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, pages 18-21. Also see GEO Group’s Annual

Report (Form 10-K) for period ended 31 December 2015, pages 125-132.

27	 CCA’s Second Amendment to Amended and Restated Credit Agreement, dated 22 July 2015.
28	 CCA’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 14.

29	 Commitment percentages and lines of credit: CCA’s Second Amendment to Amended and Restated Credit Agreement,

dated 22 July 2015, Schedule 1. Total loan: CCA’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, pages 1415. The loans for each company were derived from the other numbers in the table.
30	 $785 million: CCA’s Amended and Restated Credit Agreement, dated 6 January 2012. 114-page credit agreement: CCA’s
Second Amendment to Amended and Restated Credit Agreement, dated 22 July 2015.
31	 CCA’s Second Amendment to Amended and Restated Credit Agreement, dated 22 July 2015, pages 34-35.
32	 CCA’s Second Amendment to Amended and Restated Credit Agreement, dated 22 July 2015, pages 33-35.
33	 CCA’s Second Amendment to Amended and Restated Credit Agreement, dated 22 July 2015, page 42.
34	 CCA’s Quarterly Report (Form 10-Q) for the period ended 30 June 2016, page 57.
35	 CCA’s Quarterly Report (From 10-Q) for period ended 30 June 2016, page 14. Also see GEO Group’s Quarterly Report
(Form 10-Q) for period ended 30 June 2016, page 18.
36	 CCA’s Annual Report (Form 10-K) for fiscal year ended 31 December 2015, page 52. Also see GEO Group’s Annual Report
(Form 10-K) for fiscal year ended 31 December 2015, page 86. CCA’s and GEO Group’s expenses include operating
expenses, general and administrative expenses, and depreciation and amortization expenses. The calculations were
made assuming CCA and GEO Group incurred operating costs at a steady rate.
37	 $450 million: GEO Group’s Quarterly Report (Form 10-Q) for the period ended 30 June 2016, page 18. Six banks: GEO
Group’s Amendment No. 1 to Second Amended and Restated Credit Agreement, dated 19 May 2016. Note: According to
the credit agreement, BNP Paribas is the administrative agent and Bank of America, Barclays, JPMorgan Chase, SunTrust,
and Wells Fargo are the co-syndication agents. The credit agreement does not include a list of other lenders.
38	 GEO Group’s Amendment No. 1 to Second Amended and Restated Credit Agreement, dated 19 May 2016, page 2 (first
set of pages for the amendment).
39	 GEO Group’s Amendment No. 1 to Second Amended and Restated Credit Agreement, dated 19 May 2016, page 31. Note:
When the revolving credit line was $700 million, JPMorgan Chase was not a lender.
40	 GEO Group’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 19.
41	 GEO Group’s Amendment No. 1 to Second Amended and Restated Credit Agreement, dated 19 May 2016, pages 43 and
53.
42	 GEO Group’s Amendment No. 1 to Second Amended and Restated Credit Agreement, dated 19 May 2016, pages 19, 30,
and 43.
43	 The GEO Group’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 22.
44	 CCA’s Third Amendment and Incremental Term Loan Agreement, dated 6 October 2015.
45	 CCA’s Third Amendment and Incremental Term Loan Agreement, dated 6 October 2015, pages 43 and 49. Also see CCA’s
Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 14.
46	 CCA’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 14.
47	 Commitment percentages: CCA’s Third Amended and Incremental Term Loan Agreement, dated 6 October 2015,
Schedule 1. Total loan value: CCA’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 14. The values of
the loans for each bank were derived from the commitment percentages and the total loan value.
48	 CCA’s Third Amendment and Incremental Term Loan Agreement, dated 6 October 2015.
49	 GEO Group’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 18.
50	 GEO Group’s Amended and Restated Credit Agreement, dated 3 April 2013. Also see GEO Group’s Second Amended and
Restated Credit Agreement, dated 27 August 2014. Note: JPMorgan Chase is excluded from this list, while included on
the list of banks that extended revolving credit to CCA, because JPMorgan became a co-syndication agent in May 2016,
after original term loan agreement was signed. See GEO Group’s Amendment No. 1 to Second Amended and Restated
Credit Agreement, dated 19 May 2016.
51	 $300 million: GEO Group’s Amended and Restated Credit Agreement, dated 3 April 2013, page 75. GEO Group’s current
term loan debt is $291 million: GEO Group’s Quarterly Report (Form 10-Q) for period ended 30 June 2016. The interest
payments are unknown since the interest rate is variable.
52	 GEO Group’s Quarterly Report for period ended 30 June 2016, pages 19 and 60.
53	 CCA’s First Supplemental Indenture (for 5.00% bonds due 2022), dated 25 September 2015.
54	 CCA’s Prospectus Supplement (for 5.00% bonds due 2022), dated 21 September 2015, page S-55. Note: Canaccord
Genuity is listed as an underwriter, but underwrote $0 of the notes.
55	 CCA’s Registration Rights Agreement (for 4.125% bonds due 2020), dated 4 April 2013. Also see CCA’s Registration Rights
Agreement (for 4.625% bonds due 2023), dated 4 April 2013.
56	 CCA’s Registration Rights Agreement (for 4.125% bonds due 2020), dated 4 April 2013. Also see CCA’s Registration Rights
Agreement (for 4.625% bonds due 2023), dated 4 April 2013.
57	 CCA’s Indenture (for 5.00% bonds due 2022), dated 25 September 2015, page 22.
58	 CCA’s Annual Report (Form 10-K) for year ended 31 December 2015, Description of Exhibits.
59	 GEO Group’s Current Report (Form 8-K) from 18 April 2016.
60	 GEO Group’s Prospectus Supplement (for 6.00% bonds due 2026) dated 11 April 2014, page S-89.
61	 GEO Group’s Current Report (Form 8-K) from 25 September 2014.
62	 GEO Group’ Prospectus Supplement (for 5.875% bonds due 2024) dated 22 September 2014, page S-94.
63	 GEO Group’s Current Report (Form 8-K) from 3 October 2013.
64	 GEO Group’s Current Report (Form 8-K) from 19 March 2013.
65	 Wells Fargo: GEO Group’s Registration Rights Agreement (for 5.875% bonds due 2022) dated 3 October 2013. Merrill
Lynch: GEO Group’s Registration Rights Agreement (for 5.125% bonds due 2023) dated 19 March 2013.

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66	 GEO Group’s Indenture (for 5.125% bonds due 2023) dated 19 March 2013. Also see GEO Group’s Indenture (for 5.875%

bonds due 2022) dated 3 October 2013. Also see GEO Group’s Second Supplemental Indenture (for 6.00% bonds due
2026) dated 18 April 2016. Also see GEO Group’s First Supplemental Indenture (for 5.875% bonds due 2024) dated 25
September 2014.
67	 Data come from Bloomberg Terminal database on 14 October 2016.
68	 Data come from Bloomberg Terminal database on 14 October 2016.
69	 For sources, see Appendix B. To purchase some companies, GEO Group supplemented the debt with cash on hand.
70	 For sources, see Appendix B.
71	 For sources, see Appendix B.
72	 For sources, see Appendix B. To purchase these companies, CCA might have supplemented the debt with cash on hand.
73	 For sources, see Appendix B.
74	 GEO Group’s Annual Report (Form 10-K) for fiscal year ended 31 December 2015, page 62.
75	 GEO Group’s Annual Report (Form 10-K) for fiscal year ended 31 December 2015, page 62.
76	 Families Against Mandatory Minimums, “Recent State-Level Reforms to Mandatory Minimum Laws, downloaded from
famm.org/wp-content/uploads/2013/08/FS-List-of-State-Reforms-2.25.pdf, 7 November 2016. Also see “What You Need
to Know About the New Federal Prisoner Release,” The Marshall Project, 29 October2015.
77	 Quote: The GEO Group, Inc., “The GEO Group’s (GEO) CEO George Zoley on Q1 2016 Results – Earnings Call Transcript,”
28 April 2016. Vice president: The GEO Group, Inc., “Management Team,” downloaded from www.geogroup.com/
management_team, 20 October 2016.
78	 GEO Group’s Annual Report (Form 10-K) for fiscal year ended 1 January 2012, pages 58-59. $180 million is the sum of the
increase in revenues for the company’s “U.S. Corrections & Detention” branch and “GEO Care” branch ($86.6 and $93.1
million respectively).
79	 Corrections Corporation of America, “Third Quarter 2015 Investor Presentation,” November 2015, page 9.
80	 CCA: CCA, “What the REIT Really Means” (press release), 20 May 2013. GEO Group: GEO Group, “GEO World” (magazine),
first quarter, 2013.
81	 GEO Group’s Annual Report (Form 10-K) for fiscal year ended 31 December 2015, page 142. Note: GEO Group paid $4.5
million in foreign income taxes.
82	 Mike Ludwig, “How Private Prison Companies Use Big Tax Breaks and Low Wages to Maximize Profit" Truthout, 8 April 2016.
83	 GEO Group’s Annual Report (Form 10-K) for fiscal year ended 31 December 2015, page 7.
84	 The GEO Group, Inc., “The GEO Group, Inc. Closes $250 Million Offering of Senior Unsecured Notes Due 2022 at 57⁄8%”
(press release), 3 October 2013.
85	 CCA’s Annual Report (Form 10-K) for fiscal year ended 31 December 2015, page 81.
86	 GEO Group’s Annual Report (Form 10-K) for fiscal year ended 31 December 2015, page 73.
87	 For sources, see the column headings in the table.
88	 CCA’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 2 (“Interest expense, net”). Also see GEO Group’s
Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 3 (“Interest expense”).
89	 CCA’s Annual Report (Form 10-K) for fiscal year ended 31 December 2015, page 52 (“Interest expense, net”). Also see GEO
Group’s Annual Report (Form 10-K) for fiscal year ended 31 December 2015, page 86 (“Interest Expense”).
90	 CCA: CCA’s Second Amendment to Amended and Restated Credit Agreement, dated 22 July 2015, page 46. GEO Group:
GEO Group’s Amendment No. 1 to Second Amended and Restated Credit Agreement, dated 19 May 2016, page 68.
91	 GEO Group’s Amendment No. 1 to Second Amended and Restated Credit Agreement, dated 19 May 2016, pages 2
(second set of pages for the credit agreement) and 21.
92	 CCA: CCA’s Second Amendment to Amended and Restated Credit Agreement (22 July 2015), pages 2 (second set of
pages for the credit agreement) and 46. GEO Group: GEO Group’s Amendment No. 1 to Second Amended and Restated
Credit Agreement, dated 19 May 2016, pages 3 (second set of pages for the credit agreement) and 68.
93	 GEO Group’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 19.
94	 Corrections Corporation of America’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 14.
95	 CCA’ s Third Amendment and Incremental Term Loan Agreement, dated 6 October 2016, page 48
96	 GEO Group’s Second Amended and Restated Credit Agreement, dated 27 August 2014, page 3. Technically, the interest
for GEO Group’s term loan is the summation of a base rate and an applicable rate, but the applicable rate is set by the
type of base rate, not the debt-to-earnings ratio.
97	 CCA’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 14.
98	 GEO Group’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 19.
99	 GEO Group’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, page 20.
100	 CCA’s Second Amendment to Amended and Restated Credit Agreement, dated 22 July 2015, page 2 (second set of
pages for the credit agreement).
101	 CCA’s Second Amendment to Amended and Restated Credit Agreement, dated 22 July 2015, page 2 (second set of
pages for the credit agreement).
102	 GEO Group’s Amendment No. 1 to Second Amended and Restated Credit Agreement, dated 19 May 2016, page 3
(second set of pages for the credit agreement).
103	 CCA’s Second Amendment to Amended and Restated Credit Agreement, dated 22 July 2015, page 43. Also see GEO
Group’s Amendment No. 1 to Second Amended and Restated Credit Agreement, dated 19 May 2016, page 67.
104	 CCA’s Second Amendment to Amended and Restated Credit Agreement, dated 22 July 2015, page 43.
105	 CCA’s Amended and Restated Credit Agreement, dated 6 January 2012, page 44. Also see GEO Group’s Second
Amended and Restated Credit Agreement, dated 27 August 2014, page 110. Note, GEO Group’s credit agreement uses
the term “letter with respect to fees” instead of “fee letter.”
106	 CCA’s Prospectus Supplement (for 5.00% bonds due 2022), dated 21 September 2015, page S-55. The values in the
table were derived by multiplying the principal amount of notes each bank agreed to underwrite by 0.75 percent, the
underwriting discount per note.

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107	 GEO Group’s Prospectus Supplement (for 6.00% bonds due 2026), dated 11 April 2016, second page (no page number in

filing). The values in the table were derived by multiplying the principal amount of notes each bank agreed to underwrite
(on page S-89) by 1.5 percent, the underwriting discount per note.
108	 GEO Group’s Prospectus Supplement (for 5.875% bonds due 2024), dated 22 September 2014, second page (no page
number in filing). The values in the table were derived by multiplying the principal amount of notes each bank agreed to
underwrite (on page S-94) by 1.5 percent, the underwriting discount per note.
109	 CCA’s Indenture (for 5.00% bonds due 2022), dated 25 September 2015, page 29.
110	 Total interest payments for each offering are derived from multiplying the follow: (1) the interest rate, (2) the number of
years between when the bonds were issued and when they mature, and (3) the value of the offering.
111	 Total interest payments for each offering are derived from multiplying the follow: (1) the interest rate, (2) the number of
years between when the bonds were issued and when they mature, and (3) the value of the offering.
112	 Data come from Bank of America’s, JPMorgan Chase’s, U.S. Bancorp’s, and Wells Fargo’s 13F forms for the quarter ended
30 June 2016.
113	 Christopher Ingraham, “Private prison stocks collapse after Justice Department promises to phase them out,” The
Washington Post, 18 August 2016.
114	 The GEO Group, Inc., “2015 Annual Report,” page 28. Also see Corrections Corporation of America’s Annual Form (Form
10-K) for fiscal year ended 31 December 2015, page 3.
115	 “$1.5 billion” comes from CCA’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, pages 14-16. “$1.9 billion”
comes from GEO Group’s Quarterly Report (Form 10-Q) for period ended 30 June 2016, pages 18-21. “$39 million” was
derived by subtracting CCA’s trailing 12-month dividends ($255 million) from the adjusted funds from operations ($294
million). “$81 million” was derived by subtracting GEO Group’s trailing 12-month dividends ($192 million) from the
adjusted funds from operations ($273 million). The 12-month dividends ($255 million and $192 million) come from the
FactSet database. $294 million comes from CoreCivic, “Supplemental Financial Information” for the quarter ended 30
September 2016, page 1. $273 million comes from The GEO Group, “The GEO Group Reports Third Quarter 2016 Results”
(press release), 3 November 2016. The adjusted funds from operations numbers are for 2016. The 12-month dividends
numbers are for the last quarter of 2015 and first three quarters of 2016. For this reason, $39 million and $81 million
remaining after dividend payments are approximations.
116	 For more on these companies, see the “Prison Industry” webpage of the “Investigate” website managed by American
Friends Service Committee (investigate.afsc.org/screens/prisons).
117	 For example see American Friends Service Committee, Grassroots Leadership, and South Center for Human Rights,
“Treatment Industrial Complex: How For-Profit Prison Corporations Are Undermining Efforts to Treat and Rehabilitate
Prisoners for Corporate Gain,” November 2014. Also see Eli Hager and Alysia Santo, “Private Prisoner Vans’ Long Road of
Neglect,” The New York Times, 6 July 2016. Also see Human Rights Watch, “Profiting from Probation: America’s ‘OffenderFunded’ Probation Industry,” 2014. Also see Daniel Wagner, “Prison bankers cash in on captive customers,” The Center for
Public Integrity, 30 September 2014.
118	 Wells Fargo & Company, “Wells Fargo and Wachovia Merger Completed” (press release), 1 January 2009.
119	 GEO Group’s Annual Report (Form 10-K) for fiscal year ended 31 December 2006, page 4.
120	 GEO Group’s Annual Report (Form 10-K) for fiscal year ended 31 December 2015, pages 108-109. Also see Soberlink,
“How It Works,” downloaded from www.soberlink.com/mobile-alcohol-monitoring-breathalyzer/, 20 October 2016.
121	 GEO Group’s Current Report (Form 8-K) from 25 January 2015. Also see The GEO Group, Inc., “The GEO Group Announces
Acquisition of Eight Correctional and Detention Facilities Totaling More than 6,500 Beds” (press release), 26 January 2015.
122	 BI, “BI Incorporated acquires Protocol Government Solutions,” downloaded from bi.com/blog/industry-news/biincorporated-acquires-protocol-government-solutions, posted on 12 March 2014.
123	 The GEO Group Inc., “The GEO Group Signs Agreement to Purchase 100% Interest in Municipal Corrections Finance,
L.P. for $27 Million” (press release), 7 May 2012. Also see GEO Group’s Annual Report (Form 10-K) for fiscal year ended 31
December 2012, page 5.
124	 GEO Group’s Annual Report (Form 10-K) for fiscal year ended 2 January 2011, pages 4 and 67. Also see The GEO Group,
Inc., “The GEO Group Announces $415 Million Acquisition of B.I. Incorporated” (press release), 21 December 2010. The
value of the
125	 The sum of $150 million (the value of the term loan) and $293.3 million (the value of the bonds) is greater than $415
million (the acquisition cost of B.I. Inc.). One possible explanation is that not all proceeds from the bond offering were
used to acquire B.I. Inc.
126	 The GEO Group, Inc., “The GEO Group and Cornell Companies Announce $685 Million Merger,” 19 April 2010. Also see
GEO Group’s Annual Report (Form 10-K) for fiscal year ended 2 January 2011, page 5.
127	 The GEO Group, Inc., “The GEO Group and Cornell Companies Announce $685 Million Merger,” 19 April 2010.
128	 GEO Group’s Annual Report (Form 10-K) for fiscal year ended 3 January 2010, page 4. Also see The GEO Group, Inc., “The
GEO Group Closes Acquisition of Just Care, Inc.” (press release), 1 October 2009.
129	 GEO Group’s Annual Report (Form 10-K) for fiscal year ended 31 December 2006, Page 4. Also see The GEO Group, Inc.,
“The GEO Group, Inc. Closes Acquisition of CentraCore Properties Trust” (press release), 24 January 2007.
130	 The GEO Group, Inc., “The GEO Group, Inc. Announces Closing of Acquisition of Correctional Services Corporation;
Divests Juvenile Services Division” (press release), 7 November 2005.
131	 Corrections Corporation of America, “CCA Acquires Correctional Management, Inc.” (press release), 11 April 2016.
132	 Corrections Corporation of America, “CCA Announces Acquisition of Avalon Correctional Services, Inc.” (press release),
29 October 2015.
133	 Corrections Corporation of America, “CCA Acquires Correctional Alternatives, Inc.” (press release), 5 August 2013.

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