Correctional Services Corporation Finalizes New $95 Million Financing.SARASOTA, Fla.--(BUSINESS WIRE)--Sept. 2, 1999-- Correctional Services Corporation (Nasdaq NMS See NetWare Management System. :CSCQ CSCQ Centre Suisse de Contrôle de Qualité (French: Organisation for Quality Control of Medical Analysis; Switzerland) CSCQ China Soaring Crane Qigong CSCQ Conseil de la Santé Communautaire du Québec ), today announced it has finalized a new $95 million financing. The new financing, which replaces CSC's current $30 million financing with NationsBank, is being provided by Summit Bancorp and is expected to be syndicated to a group of additional banks. The new financing consists of the following components: (i) a $45 million for the construction, ownership and acquisition of correctional facilities and (ii) two facilities aggregating $50 million which may be used for working capital, general corporate purposes and for the repayment of the 7% subordinated debentures issued by CSC's Youth Services International subsidiary. The financing subjects the company to various financial covenants, borrowing base criteria and other customary provisions. At the closing of the new financing, the Company paid off all outstanding bank obligations under its existing credit facility. In addition, pursuant to agreements with several debenture holders, the company has agreed to redeem $16,275,000 of the $30,470,000 in outstanding 7% subordinated debentures issued by Youth Services International. Under the terms of those agreements, the Company will redeem this portion of the debentures at a redemption price Redemption price See: Call price redemption price 1. The price at which an open-end investment company will buy back its shares from the owners. In most cases, the redemption price is the net asset value per share. 2. of 90% of the original principal thereof plus accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. . It is expected that the one time gain from redemption will be entirely offset by the write off of certain deferred costs and charges related to the previous financing and costs associated with the redemption. The remaining debentures are due to mature March 31, 2000 and are expected to be repaid from funds available from this new facility. "This new financing significantly enhances the Company's capital structure and is an important part of our strategic plan," stated James F. Slattery CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and President. "Summit Bank has provided us with a facility that is expected to satisfy our capital needs for the foreseeable future and provides the flexibility needed to operate in our dynamic industry. Not only did we more than triple the size of our financing and provide for the redemption of the outstanding debentures but we also have firmly positioned the company for continued growth." Through its Youth Services International subsidiary, the Company is the nation's leading private provider of juvenile programs for adjudicated youths with 38 facilities and 4,909 juveniles in its care. In addition, Correctional Services Corporation is a leading developer and operator of adult correctional facilities operating 20 facilities representing approximately 7,300 beds. On a combined basis, the company provides services in 22 states and Puerto Rico, representing approximately 12,109 beds including aftercare af·ter·care n. Follow-up care provided after a medical procedure or treatment program. aftercare the care and treatment of a convalescent patient, especially one that has undergone surgery. services. SAFE HARBOR Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. REFORM ACT OF 1995 Certain statements contained in this press release are not historical but are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These include statements regarding the expectations, beliefs, intentions or strategies regarding the future. The Company intends that all forward-looking statements be subject to the safe-harbor provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements reflect the Company's views as of the date they are made with respect to future events and financial performance, but are subject to many uncertainties and risks which could cause the actual results of the Company to differ materially from any future results expressed or implied by such forward-looking statements. Examples of such uncertainties and risks include, but are not limited to: the integration of Youth Services International; occupancy levels; the renewal of contracts, the ability to secure new contracts; availability and cost of financing to redeem YSI's debentures and to expand our business; and public resistance to privatization privatization: see nationalization. privatization Transfer of government services or assets to the private sector. State-owned assets may be sold to private owners, or statutory restrictions on competition between privately and publicly owned . Additional risk factors include those discussed in the Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. as well as those set forth in the Company's joint proxy statement/prospectus, dated March 4, 1999 and those set forth in reports filed by the Company from time to time on Forms 10-Q and 8-K. The Company does not undertake any obligation to update any forward-looking statements. |
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