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| Item 1.01. |
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Entry Into a Material Definitive Agreement. |
Entry Into Supplement and Supplemental Indentures
On May 14, 2009, Corrections Corporation of America, a Maryland corporation (the “Company”),
certain of its subsidiaries and U.S. Bank National Association, as trustee, entered into each of
the following in order to add a recently-formed subsidiary of the Company, CCA Health Services,
LLC, a Tennessee limited liability company, as a guarantor of certain obligations under the
indentures governing the terms of the Company’s outstanding senior notes: (i) a First Supplement,
dated as of May 14, 2009, to the First Supplemental Indenture, dated as of January 23, 2006, by and
among the Company, certain of its subsidiaries and U.S. Bank National Association, as trustee; (ii)
a First Supplemental Indenture, dated as of May 14, 2009, by and among the Company, certain of its
subsidiaries and U.S. Bank National Association, as trustee; and (iii) a Third Supplemental
Indenture, dated as of May 14, 2009, by and among the Company, certain of its subsidiaries and U.S.
Bank National Association, as trustee (collectively, the “Supplements”). The foregoing description
does not purport to be complete and is qualified in its entirety by reference to the Supplements,
which are attached hereto as Exhibit 4.1, Exhibit 4.2 and Exhibit 4.3,
respectively and are incorporated herein by reference.
Entry into Underwriting Agreement
On May
19, 2009, the Company entered into an Underwriting Agreement
(the “Underwriting Agreement”) with the several underwriters named
therein, for which J.P. Morgan Securities Inc., Banc of America Securities LLC and Wachovia
Capital Markets, LLC acted as representatives, for the issuance and sale by the Company of $465,000,000
aggregate principal amount of its 73/4% Senior Notes due 2017 (the “New Notes”).
The Underwriting Agreement contains customary representations, warranties and
agreements of the Company and customary conditions to closing, indemnification rights
and obligations of the parties and termination provisions. The foregoing summary does
not purport to be complete and is qualified in its entirety by reference to the Underwriting
Agreement, which is attached hereto as Exhibit 1.1 and is
incorporated herein by reference.
The New Notes
were registered with the Securities and Exchange Commission (the “Commission”) under an
automatically effective shelf registration statement (the “Registration Statement”) on
Form S-3 (333-159329) that was filed with the Commission on May 19, 2009.
In connection with the public offering of the New Notes, the
Company has also filed with the Commission a Prospectus and a related Prospectus
Supplement, each dated May 19, 2009.
The
New Notes will be issued pursuant to the provisions of a base indenture, dated as of
January 23, 2006 (the “Base Indenture”), among the Company, certain of its subsidiaries
(the “Guarantors”) and U.S. Bank National Association, as trustee (the “Trustee”).
The Base Indenture was filed with the Commission as Exhibit 4.1 to the Company’s Current Report on Form 8-K,
filed with the Commission on January 24, 2006, and is incorporated herein by reference.
The New
Notes will be unsecured senior obligations of the Company, rank equally in right of payment
with the Company’s existing and future unsecured senior debt and rank senior in right of
payment to all of the Company’s existing and future subordinated debt. The New Notes will be
effectively subordinated to the Company’s senior secured debt to the
extent of the value of the assets securing such indebtedness. The New Notes will be
guaranteed on a senior secured basis by the Guarantors.
The
New Notes will be issued at a public offering price of 97.116%, resulting
in a yield to maturity of 8.25%. Interest on the New Notes is payable
semi-annually on June 1 and December 1 of each year, commencing on December 1, 2009,
and ending on the maturity date of June 1, 2017. At any time prior to June 1, 2012,
the Company may redeem up to
35% of the aggregate principal amount of New Notes using net cash proceeds of
certain equity offerings provided that at least 65% of the aggregate principal
amount of the New Notes remains outstanding after such redemption. Beginning on
June 1, 2013, the Company may redeem all or a part of the New Notes upon not
less than 30 nor more than 60 days’ notice. The redemption price for such a
redemption (expressed as percentages of principal amount) is set forth below, plus
accrued and unpaid interest, if any, if redeemed during the twelve-month period
beginning on June 1 of the years indicated below:
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| Year |
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Percentage |
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| 2013 |
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103.875 |
% |
| 2014 |
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101.938 |
% |
| 2015 and thereafter |
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100.0000 |
% |
The
Company plans to use the net proceeds of the offering of the New Notes along with cash
on hand to purchase, redeem or otherwise acquire all of the Company’s $450.0 million
aggregate principal amount outstanding
71/2% Senior Notes due 2011 (the “2011 Notes”), and to pay
accrued interest and associated fees and expenses.
Entry into Credit Agreement Amendment
On
May 19, 2009, the Company entered into a certain Amendment No. 1 to Credit
Agreement (the “Amendment”), which amends certain of the negative covenants
contained in the Company’s Credit Agreement dated December 21, 2007 as more particularly set
forth in the Amendment, which is attached hereto as
Exhibit 10.1 and is incorporated herein by reference.
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| Item 7.01. |
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Regulation FD Disclosure. |
The Company
expects to incur a pre-tax one-time charge related to the sale of the New Notes and tender offer
for all of its 2011 Notes of approximately $4.1 million as a result of the write-off of unamortized
debt issuance costs associated with the early retirement of the 2011 Notes, net of debt premium, as
well as fees and expenses associated with the completion of the tender offer for all of the 2011 Notes.
Including the amortization of debt issuance costs and the initial issuance discount,
the Company estimates the effective interest rate on the New Notes to be approximately
8.5% compared to 7.8% on the 2011 Notes. The foregoing impact of these transactions
was not incorporated into the 2009 earnings guidance provided by the Company
in its press release on May 7, 2009.
The
information furnished pursuant to this Item 7.01 of Form 8-K shall not be deemed to
be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934,
as amended, and Section 11 of the Securities Act of 1933, as amended, or otherwise
subject to the liabilities of those sections. This Current Report will not be deemed an
admission by the Company as to the materiality of any information in this
report that is required to be disclosed solely by Item 7.01. The Company
does not undertake a duty to update the information in this Current Report.
On May 19, 2009, the Company issued a press release announcing the pricing of its public
offering of the New Notes. A copy of the press release is attached hereto as Exhibit 99.1
and is incorporated herein by reference.
On May 19, 2009, the Company commenced a cash tender offer for any and all of its 2011 Notes.
In conjunction with the tender offer, the Company is soliciting consents from holders of the 2011
Notes to effect certain proposed amendments to the indenture governing the 2011 Notes. The tender
offer and the consent solicitation (the “Offer”) are being made pursuant to an Offer to Purchase
and Consent Solicitation Statement and a related Consent and Letter of Transmittal, each dated as
of May 19, 2009. The Offer will expire at 11:59 p.m., New York City time, on June 16, 2009, unless
extended or earlier terminated (the “Expiration Date”).
Holders who validly tender their 2011 Notes and provide their consents to the proposed
amendments to the indenture governing the 2011 Notes prior to the consent payment deadline of 5:00
p.m., New York City time, on June 2, 2009, unless extended (the “Consent Date”), shall receive the
total consideration equal to $1,001.25 per $1,000 principal amount of the 2011 Notes, which
includes a consent payment of $1.25 per $1,000 principal amount of the 2011 Notes, plus any accrued
and unpaid interest on the 2011 Notes up to, but not including, the payment date.
Holders who validly tender their 2011 Notes and provide their consents to the proposed
amendments to the indenture governing the 2011 Notes after the Consent Date but on or prior to the
Expiration Date shall receive the tender offer consideration equal to $1,000 per $1,000 principal
amount of the 2011 Notes, plus any accrued and unpaid interest on the 2011 Notes up to, but not
including, the payment date for such 2011 Notes. Holders of 2011 Notes who tender after the
Consent Date will not receive a consent payment.
Upon receipt of the consent of the holders of a majority in aggregate principal amount of the
outstanding 2011 Notes, the Company will execute a supplemental indenture effecting the proposed
amendments. Except in certain circumstances, 2011 Notes tendered and consents delivered may not be
withdrawn or revoked after execution of the supplemental indenture.
The Offer is subject to customary conditions, including, among other things, a requisite
consent condition and a financing condition.
On May 19, 2009, the Company issued a press release announcing the commencement of the Offer.
A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated herein
by reference.
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| Item 9.01. |
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Financial Statements and Exhibits. |
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1.1
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Underwriting Agreement, dated as of May 19, 2009, by and among the Company, the guarantors listed therein, J.P. Morgan Securities
Inc., Bank of America Securities LLC and Wachovia Capital Markets, LLC, as representatives of the several underwriters listed
therein, relating to the Company’s 73/4% Senior Notes due 2017.
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4.1
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First Supplement, dated as of May 14, 2009, to the First Supplemental Indenture,
dated as of January 23, 2006, by and among the Company, certain of its subsidiaries
and U.S. Bank National Association, as trustee. |
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4.2
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First Supplemental Indenture, dated as of May 14, 2009, by and
among the Company, certain of its subsidiaries and U.S. Bank National
Association, as trustee. |
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4.3
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Third Supplemental Indenture, dated as of May 14, 2009, by and among
the Company, certain of its subsidiaries and U.S. Bank National Association, as
trustee. |
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10.1
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Amendment No. 1 to Credit Agreement, dated as of May 19, 2009,
by and among the Company, Bank of America, N.A., as administrative agent, and each of the lenders
signatory thereto.
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99.1
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Press Release dated May 19, 2009 Announcing Pricing of Senior Notes. |
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99.2
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Press Release dated May 19, 2009 Announcing Tender Offer. |