HIG-Backed Prison Vendor Begins Debt Sale Amid Industry Scrutiny
(Bloomberg) -- TKC Holdings Inc., a provider of food, commissary and phone services to prisons, has started marketing a $1.625 billion debt sale at a time of increased scrutiny for investors in the corrections industry.
The H.I.G. Capital-owned company plans to offer bonds and loans as part of the offering, which will help it refinance existing debt. The deal comes as criticism of companies that profit from incarceration grows louder among social justice activists, Democrats and some investors.
Those critics scored one of their biggest victories on Monday, when Barclays Plc walked away from a municipal bond offering to finance the construction of two prisons owned by CoreCivic Inc. in Alabama after facing opposition from activists as well as investors focused on environmental and social causes.
Barclays and other major banks had pledged to stop providing new financing to private prison operators such as CoreCivic Inc. and Geo Group Inc., its main rival. Providers of ancillary services to prisons and jails are generally viewed as less controversial on Wall Street.
TKC has hired Jefferies Financial Group Inc. to arrange the loan portion of the financing, according to people with knowledge of the matter who asked not to be named because they’re not authorized to speak publicly. Jefferies has handled prior debt offerings for the company, according to data compiled by Bloomberg.
Representatives for Jefferies, H.I.G. and TKC didn’t immediately respond to requests for comment.
TKC plans to split the debt offering between a $1.125 billion seven-year loan and a $500 million eight-year bond, according to S&P Global Ratings.
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