Australia’s GEO Group has refinanced the remaining bank debt on Melbourne’s Ravenhall Correctional Centre PPP with an AUD 461.6m (USD 317.5m) US private placement issue, according to S&P.
The senior secured, fixed rate bond was priced on 21 May and carries an A-minus credit rating, the agency said in a statement.
The amount raised is slightly higher than the AUD 459.6m originally envisaged and, at an interest rate of 4.23%, a little below the 4.5% expected, giving a debt service coverage ratio of 1.43x compared with 1.4x, according to a source familiar with the matter.
The new debt has a tenor of 22.5 years and will mature on 31 March 2042.
The bond raising refinances about AUD 448m of remaining debt outstanding on the PPP, which reached financial close in September 2014. The transaction includes AUD 5.7m of existing currency swaps, financing fees of AUD 5m and other transaction costs of AUD 2.8m, sources said.
The Melbourne prison project was originally financed with a AUD 770.89m loan from Commonwealth Bank, DZ Bank, NAB and Westpac bank, according to Inframation Deals.
The GEO consortium – including GEO Group, Capella Capital, Honeywell International, John Holland and Forensicare – won the tender to build and maintain the 1,000-bed prison in August 2014.
Barclays and Allens are advising on the deal.