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EXHIBIT 99.1
Contact:
Media Contact - Susan Hart (615) 263-3104
Investor Contact - Karin Demler (615) 263-3005
CORRECTIONS CORPORATION OF AMERICA
OBTAINS CONSENT AND AMENDMENT TO
BANK CREDIT FACILITY
NASHVILLE, Tenn. - (November 21, 2000) - Corrections Corporation of
America (formerly Prison Realty Trust, Inc.) (NYSE: CXW) (the "Company")
announced today that it has obtained, effective November 17, 2000, amendments to
the credit agreement governing its $1.0 billion senior secured credit facility
with a syndicate of banks led by Lehman Commercial Paper Inc., as Administrative
Agent, as well as the consent of the bank syndicate to certain transactions
previously restricted by the facility (the "Consent and Amendment"), thereby
avoiding an event of default by the Company under the facility. The complete
text of the Consent and Amendment will be included as an exhibit to a Current
Report on Form 8-K to be filed by the Company with the U.S. Securities and
Exchange Commission (the "Commission") via EDGAR.
The Consent and Amendment, which was obtained on terms previously
described in the Company's Quarterly Report on Form 10-Q filed with the
Commission on November 14, 2000 and as disclosed by the Company, replaces the
previously existing financial covenants contained in the credit agreement
governing the facility with the following financial covenants, each as defined
in the Consent and Amendment: (i) total leverage ratio; (ii) post merger
interest coverage ratio; (iii) fixed charge coverage ratio; (iv) ratio of total
indebtedness to total capitalization; (v) minimum post merger EBIDTA; and (vi)
total beds occupied ratio. The Consent and Amendment also consents to certain
transactions undertaken or to be completed by the Company and each of Prison
Management Services, Inc. ("PMSI") and Juvenile and Jail Facility Management
Services, Inc. ("JJFMSI"), two affiliated service companies, including the
non-cash mergers of each of PMSI and JJFMSI with and into the Company's wholly
owned operating subsidiary. As a result of this consent, it is anticipated that
the Company will complete the mergers with the service companies prior to
December 31, 2000.
The Consent and Amendment further provides that the Company will be
required to use commercially reasonable efforts to complete a "capital raising
event" on or before June 30, 2001. A "capital raising event" is defined in the
Consent and Amendment as any combination of the following transactions, which
together would result in net cash proceeds to the Company of $100.0 million: (i)
an offering of the Company's common stock through the distribution of rights to
the Company's existing stockholders; (ii) any other offering of the Company's
common stock or certain types of the Company's preferred stock; (iii) issuances
by the Company of unsecured, subordinated indebtedness providing for in-kind
payments of principal and interest until repayment of the credit facility; (iv)
certain types of asset sales by the Company, including the sale-leaseback of the
Company's headquarters. The Consent and Amendment also contains limitations upon
the use of proceeds obtained from the completion of such "capital raising
events." The requirements relating to "capital raising events" contained in the
Company's credit agreement would replace the requirement currently contained in
the credit agreement that the Company use commercially reasonably efforts to
consummate a rights offering on or before December 31, 2000.
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As a result of the Consent and Amendment, the current interest rate
applicable to the Company's credit facility remains unchanged. This applicable
rate, however, is subject to (i) an increase of 25 basis points (0.25%) from the
current interest rate on July 1, 2001 if the Company has not prepaid $100.0
million of the outstanding loans under the credit facility, and (ii) an increase
of 50 basis points (0.50%) from the current interest rate on October 1, 2001 if
the Company has not prepaid an aggregate of $200.0 million of the loans under
the credit facility.
The maturities of the loans under the credit facility remained unchanged
as a result of the Consent and Amendment.
ABOUT THE COMPANY
The Company and its affiliated companies are the nation's largest
provider of detention and corrections services to governmental agencies. The
Company and its affiliated companies are the industry leader in private sector
corrections with approximately 61,000 beds in 68 facilities under contract for
management in the United States and Puerto Rico. The Company owns 44
correctional and detention facilities with a design capacity of approximately
41,693 beds in the United States and the United Kingdom. The Company's full
range of services includes design, construction, ownership, renovation and
management of new or existing jails and prisons, as well as long distance inmate
transportation services.
FORWARD-LOOKING STATEMENTS
This press release contains statements that are forward-looking
statements as defined within the Private Securities Litigation Reform Act of
1995. These forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from the statements made.
Factors that could cause operating and financial results to differ are described
in the Company's Form 10-K, as well as in other documents filed with the
Commission, and these factors include, but are not limited to, the growth of the
private corrections and detention industry, the Company's ability to obtain and
maintain facility management contracts and general market conditions. The
Company does not undertake any obligation to publicly release the result of any
revisions to forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
