- Barclays Plc's membership in the American Sustainable Business Council was terminated by the advocacy group over the bank's decision to underwrite a private bond for two Alabama prisons owned by CoreCivic Inc. two years after saying it would no longer provide new financing to municipal prison companies.
The council and partner organization Social Venture Circle, which combined represent 250,000 businesses to advocate for responsible practices and policies, announced Thursday that they would refund Barclays membership fees. In 2019 Barclays joined the group; Barclays is the lead underwriter of bonds sold by CoreCivic through a Wisconsin agency to provide financing for a limited liability company owned by Barclays.
The new prisons will be leased and staffed by the Alabama Corrections Department. Because Barclays is n't arranging the financing directly for CoreCivic, the bank has said that the commitment we made in 2019 to not finance private prison companies remains in place.
The bonds are owned by Alabama Holdings LLC, an entity owned by CoreCivic. The bond deal was initially scheduled to price on Thursday, but has been moved to next week, according to two pre-marketing wires viewed by Bloomberg.
The bank has cut the total par value on the public bonds by about$ 200 million, the wires show. According to a person familiar with the matter, Barclays has seen strong demand for private placement portion. It's the first time the groups have kicked out a member, David Levine, co-founder of the council, said in an interview.
In a statement the groups said they refuse to perpetuate mass incarceration, systemic racism and human rights abuses through the offering of bonds. This was a big move on our part, Levine added; Alabama officials have said the deal with CoreCivic will help improve conditions within the prison system.
The state was sued by the U.S. Department of Justice in December 2020 for failing to protect male prisoners from violence and unsanitary conditions.
Kristi Simpson, spokesperson for the Alabama Department of Corrections, said in an emailed statement that the new prisons will help to improve the environment and increase the quality of life for all who live and work in them. Isaac Graves, interim executive director of Social Venture Circle, said the group wanted to signal to other financial service providers that they should n't find a creative way to finance private prison companies- which is exactly what they said they would not do.
While the prisons will be publicly run, CoreCivic said that the structure will not profit the prison system and to ultimately progress Levine.
The fact that it is owned by a private company says it all, he said.
For more articles like this, please visit us at bloomberg.com.
Subscribe now to stay ahead with the most trusted business news source.