23 April- CoreCivic Inc said on Monday it expects to move forward with a bond sale for Alabama prisons after two of three underwriters signed the deal, which had come under attack by social justice activists.
Barclays Plc, the senior underwriter for the taxable bond deal originally sized at$ 633.5 million, and KeyBanc Capital Markets, a co-manager, confirmed that they were no longer participating in the bond price in the municipal market.
In a statement, CoreCivic said it was proceeding with efforts to replace poorly built, modern corrections infrastructure to replace dilapidated, aging facilities that were originally designed with one purpose in mind to warehouse individuals, not rehabilitate returning citizens.
A company spokeswoman did not immediately give details on how or when the bond transaction would take place.
Reps of Stifel Financial Corp, the third underwriter of the deal, did not immediately respond to inquiries for comment.
The stock of CoreCivic was down about 2.5% on the New York Stock Exchange to$ 8.39 a share.
In February, Alabama agreed to buy 30-year leases with CoreCivic for two new correctional facilities the company would build for about 7,000 prisoners.
While state officials insisted that the prisons would not be private because they will be staffed and operated by the Alabama Department of Corrections, activists called on investors last week to snub the bonds and for the underwriters to withdraw from the deal.
There should be no tolerance for any company or investor who profit from a business model that is dependent on the imprisonment and continuing captivity of other men and women, wrote a group of activists in an April 12 letter criticizing CoreCivic, the private prison industry and Alabama's prison system.
Signatories included investors from social groups and religious investment managers. Eric Glass was also among the signers: Eric Glass, a senior portfolio manager for AllianceBernstein's municipal impact portfolio.
He said he was only signing in his portfolio manager role, but a representative for the$ 700 billion asset manager also said it would not participate in the offering as it violated the company's modern slavery policy. CoreCivic accused the activists of being reckless and irresponsible, saying that they are in effect advocating for dangerous facilities, less rehabilitation space and potentially outdated conditions for correctional staff and inmates alike.
Last week, Social Venture Circle refunded the barclays corporate membership and terminated its$ 15,000 sponsorship and membership dues over the bank's participation in the bond sale.
In its statement about not participating in the deal, Barclays said: While our objective was to allow the state to improve its facilities, we recognize that this is a complex and important issue.
In light of the feedback that we have heard, we will continue to review our policies. The bonds, to be rated by the Public Finance Authority, were issued by S& P Global Ratings and A-minus by Moody's Investors Service.
For this reason, we ca n't say goodbye to the bad guy that he was, and why are we writing this.