Rating Upgrade
Moody’s announced on 17 June 2026 that it has upgraded the corporate family rating of GEO Group, Inc. from B2 to B1. In the same action, the agency raised the ratings on the company’s senior secured notes and senior secured bank credit facility from B1 to Ba3 and changed the outlook from positive to stable.
Operational Highlights
During the past year GEO Group re‑activated three previously idle, company‑owned facilities located in New Jersey, Michigan and Georgia. The re‑activation, together with the award of new transportation contracts and rate increases, generated a 20% year‑over‑year rise in net operating income for the first quarter of 2026. Immigration and Customs Enforcement (ICE) contracts accounted for 51% of GEO’s revenue in Q1 2026, reflecting an eight‑percentage‑point increase from the prior year. The U.S. Marshals Service was the second‑largest tenant, contributing 16% of revenue, while the electronic monitoring and supervision segment delivered 17% of net operating income in the same quarter.
Financial Metrics Outlook
Moody’s expects GEO’s net‑debt‑to‑EBITDA ratio to improve to a range of 2.5x‑3.0x over the next 12‑18 months, down from 3.5x at the end of Q1 2026. The agency also projects the EBITDA‑to‑interest‑expense coverage ratio to rise to 3.5x‑4.0x from 2.8x at the end of the first quarter of 2026, driven by both EBITDA growth and a reduction in debt levels.
Potential Asset Sale
GEO Group disclosed that it is in discussions with ICE regarding the possible sale of multiple facilities. Under any sale agreement, GEO would continue to manage the facilities under long‑term support services contracts. Proceeds from a potential sale are intended to be used to reduce debt, which would further enhance the company’s leverage and coverage ratios.