GEO notes edge lower; CoreCivic up; Mallinckrodt better; energy bonds trade mixed

By Cristal Cody

Tupelo, Miss., March 24 – GEO Group Inc.’s bonds headed out modestly softer in the secondary market following the company’s downgrade by S&P Global Ratings on Wednesday.

The company’s 5 1/8% senior notes due 2023 (B1/B-) fell about ½ point to 88½ bid in heavy secondary trading, a source said.

GEO’s 6% senior notes due 2026 (B1/B-) were quoted down less than ½ point at 71½ bid.

S&P downgraded the company by two notches to B, citing potential difficulty in paying or refinancing $1.7 billion of debt maturing in 2024, as well as debt due in 2022 and 2023.

S&P also cut the rating on CoreCivic, Inc., formerly known as the Corrections Corp. of America, by one notch to BB- on Wednesday over a less supportive operating environment and about $1 billion of debt that starts maturing in 2023.

CoreCivic’s 4¾% notes due 2027 (Ba1/BB-) improved about ½ point to the 89½ bid range over the day, a market source said.

Meanwhile, bankrupt pharmaceuticals maker Mallinckrodt plc’s bonds mostly gained, a market source said.

And distressed energy bonds were mixed in lighter secondary activity, a source said.

Offshore driller Transocean Inc.’s 11½% senior guaranteed notes due 2027 (Caa3/CCC) climbed to 86 bid after declining 3 points to 84¼ bid in the prior session.

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