S&P gives CoreCivic loan BBB-

S&P assigned its BBB- issue-level rating to CoreCivic Inc.’s proposed $250 million senior secured term loan B due in 2024 and dropped its issue-level rating on the company’s existing senior secured term loan and revolving credit facility to BB+.

The proposed loan, which benefits from improved collateral liens compared to CoreCivic’s existing secured debt, and revolver borrowings will be used to fund the redemption of $325 million outstanding under the 4 1/8% senior notes due April 2020, the agency said.

“Our downgrade reflects the company’s proposed debt issuance, which increases the amount of secured debt to about 45% of the total gross nonrecourse debt capitalization from about 25%, diluting recovery for the existing senior secured lenders,” said S&P in a press release.

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