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S&P affirms Corrections Corp. ratings

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Capital Markets View – January 2021


S&P affirms Corrections Corp. ratings

Standard & Poor's Ratings Services on March 30 affirmedCorrections Corp. ofAmerica's ratings, including its corporate credit rating atBB+.

The rating agency also affirmed its issue-level ratings onthe prison REIT's senior secured revolver and term loan at BBB and on itssenior unsecured notes at BB+. It maintained its recovery ratings on the seniorsecured debt at 1 and the notes at 3, citing its expectations for "veryhigh" and "meaningful" recovery, respectively, in case ofpayment default.

The company's ratings outlook is stable.

S&P said it views the company's "defensibleposition" as the biggest U.S. private-prison owner and operator morepositively amid the overall drop in prison populations in most states,resulting in the ratings affirmations. The company's "relativelystable" contracted revenues with credit-worthy counterparties are alsoviewed by the rating agency as a credit positive.

The stable outlook, meanwhile, takes into account S&P'sassumption that Corrections Corp.'s operating performance and cash flows willbe sustained, even as most states are experiencing decreasing prisonpopulations and federal and state governments continue to face budget deficits.Believing that these issues are unlikely to substantially affect CorrectionsCorp.'s occupancy rates, S&P noted that it expects the company to sustain"healthy and stable" cash flows throughout the rating horizon.

S&P Ratings andS&P Global Market Intelligence are owned by McGraw Hill Financial Inc.