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Bond Market News
GEO Group Upgraded to BB- on Debt Reduction; Outlook Positive
July 16, 2025
GEO Group, a Florida-based real estate firm specialising in secure facilities, immigration processing centres and community re-entry centres, was upgraded to BB- from B+ by S&P. The upgrade reflects the company’s efforts to reduce debt alongside favourable industry dynamics. GEO plans to repay senior secured debt using $222mn from the sale of its Lawton Facility and liquidity from a new $450mn revolver facility. This is expected to reduce leverage from 3.8x in Q12025 to around 2.8x by the end of the year.
The upgrade also reflects increased demand driven by the current US administration’s immigration policies. GEO has reactivated three idle facilities this year and secured significant government contracts, including a new US Marshals Service deal projected to add over $200mn in annual revenue as per S&P. S&P’s positive outlook indicates the potential for another upgrade within 12 months if GEO maintains leverage below 3x and free operating cash flow-to-debt above 10%.
GEO’s 10.25% 2031s are trading stable at 109.5, yielding 7.16%.
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