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Rating Action:

Moody's affirms CoreCivic's senior unsecured debt rating of Ba1; outlook revised to stable

Global Credit Research - 10 Mar 2017

Approximately $925 million of securities affected.

New York, March 10, 2017 -- Moody's Investors Service affirmed the Ba1 senior unsecured rating of CoreCivic, Inc. and revised the rating outlook to stable, from negative. The outlook revision reflects the current Attorney General's February 2017 memorandum, reversing the U.S. Justice Department's plans to phase out its use of privately-operated prisons.

The following ratings were affirmed:

CoreCivic, Inc. - senior unsecured rating at Ba1; senior unsecured debt shelf at (P)Ba1.

RATINGS RATIONALE

The outlook revision reflects the increased clarity surrounding the state and federal authorities' reliance on private prison facilities. The continued need for prison privatization at the state and federal levels, is a positive development for both CoreCivic and the private prison industry.

The revision of the outlook also takes into account CXW's improving operational performance, solid credit profile and increased capital market access.

Upward rating movement will be unlikely in the medium term and will require more clarity on the full effect of this announcement to the REIT's cash flows. Furthermore, continued growth in gross assets -- providing improved access to capital and consistent operating results, continued demonstration of positive revenue growth, operating margin and earnings trends, coupled with steady leverage and coverage ratios are also key drivers for upward rating momentum. In addition Moody's would expect little to no increase in the use of secured debt.

Downward rating pressure would occur from continued adverse events, such as litigation or publicity related to private prison management and it's utilization by state and federal authorities, leading to a loss of market share in private prison ownership and management. Furthermore, contract non-renewals resulting in total occupancy losses of 10% or more and declining margins would also lead to downward rating pressure.

Moody's last rating action with respect to CXW was on August 19, 2016 when Moody's downgraded the REIT's senior unsecured rating to Ba1, from Baa3 and revised the rating outlook to negative, from stable.

The principal methodology used in these ratings was Global Rating Methodology for REITs and Other Commercial Property Firms published in July 2010. Please see the Rating Methodologies page on www.moodys.com for a copy of these methodology.

CoreCivic, Inc. [NYSE: CXW] is a publicly traded real estate investment trust (REIT) and the nation's largest owner of partnership correction and detention facilities and one of the largest prison operators in the United States.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Alice Chung
Asst Vice President - Analyst
Commercial Real Estate Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Nick Levidy
MD - Structured Finance
Commercial Real Estate Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

No Related Data.
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