CoreCivic (NYSE: CXW) nets about $1.1B from major ICE facility sales
Rhea-AI Filing Summary
CoreCivic has sold its 2,560-bed California City Detention Facility and 1,994-bed Otay Mesa Detention Center to the U.S. Department of Homeland Security for a combined $1.5 billion, with $732.6 million attributed to California City and $739.2 million to Otay Mesa.
After roughly $0.4 billion of taxes and transaction costs, the company expects net proceeds of about $1.1 billion. It plans to use part of this cash to repay debt and may allocate remaining funds to general corporate purposes, including potential additional debt reduction and share repurchases, subject to leverage tests in its credit agreement and 2029 senior notes indenture.
CoreCivic currently expects to keep managing both facilities under existing contracts with ICE, but ICE can terminate for convenience or funding, and the contracts expire in August 2027 for California City and December 2029 for Otay Mesa, with a five-year extension option for Otay Mesa. The company is also discussing potential additional facility sales with ICE, though there is no assurance any further transactions will occur.
Positive
- Large cash inflow and net proceeds: CoreCivic sold the California City and Otay Mesa facilities for a combined gross price of approximately $1.5 billion and expects about $1.1 billion in net proceeds after roughly $0.4 billion of taxes and transaction expenses.
- Balance sheet and capital allocation flexibility: The company plans to use part of the proceeds to repay debt and may deploy remaining funds for general corporate purposes, including potential additional debt reduction and share repurchases, subject to leverage-based restricted payment tests in its credit agreements.
Negative
- Ongoing reliance on ICE contracts with termination risk: CoreCivic expects to continue managing the sold facilities under existing ICE contracts, but ICE can terminate for convenience or funding, and the company provides no assurance it will continue to manage these facilities or maintain current terms.
- Exposure to policy and privatization changes: The forward‑looking statements highlight risks from changes in government policy, immigration reform, privatization trends, and federal budget decisions that could affect utilization of the company’s detention capacity and its ability to renew or obtain management contracts.
Insights
Large asset sale boosts liquidity, with leverage tests gating buybacks.
CoreCivic realized a gross $1.5 billion from selling two ICE detention facilities and expects about $1.1 billion of net proceeds after roughly $0.4 billion of taxes and expenses. That is a substantial cash inflow relative to typical single-asset deals.
The company states it will use part of the proceeds for debt repayment and may use remaining funds for general corporate purposes, including share repurchases of its common stock. However, unrestricted equity payouts depend on maintaining a consolidated secured leverage ratio at or below 1.50:1.00 under the Bank Credit Facility and a consolidated total leverage ratio at or below 2.00:1.00 under the 2029 Notes Indenture, both calculated on a pro forma basis.
This structure ties shareholder capital returns to post-transaction leverage metrics while preserving flexibility to pursue acquisitions and other growth opportunities mentioned in the text. Actual impact on leverage and buyback capacity will hinge on how much of the $1.1 billion is directed to debt reduction versus new investments.
Ownership shifts to government, but ICE contract and policy risks remain.
The sale transfers real estate ownership of both facilities to the U.S. government while CoreCivic currently expects to continue managing them under existing ICE contracts. Those contracts expire in August 2027 for California City and December 2029 for Otay Mesa, with a five-year extension option on Otay Mesa.
ICE retains the right to terminate for non-appropriation of funds or for convenience, and the company cautions that it cannot assure continued management or unchanged terms. The forward‑looking statements section highlights broader risks from changes in federal policy, immigration reform, privatization trends, budgets, and procurement choices, all of which could affect facility utilization and contract renewals.
The company also notes ongoing discussions with ICE about potential additional facility acquisitions by the government, without assurance of completion. Future disclosures would clarify whether more asset sales occur and how any changes to ICE contracts influence long‑term earnings from these locations.
8-K Event Classification
Key Figures
Key Terms
Agreement of Purchase and Sale financial
management contracts financial
restricted payments financial
consolidated secured leverage ratio financial
senior notes financial
forward-looking statements regulatory
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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| Item 1.01 | Entry into a Material Definitive Agreement. |
California City Facility Sale
On July 2, 2026, CoreCivic, Inc., a Maryland corporation (the “Company”), entered into an Agreement of Purchase and Sale (the “California City Purchase Agreement”) with the United States of America and its assigns, by and through the Department of Homeland Security (“Buyer”), pursuant to which, and upon the terms and subject to the conditions set forth therein, the Company sold to Buyer its 2,560-bed California City Detention Facility in California City, California (the “California City Facility”) and certain related assets for an aggregate purchase price of approximately $732.6 million, subject to certain adjustments as set forth in the California City Purchase Agreement (the “California City Facility Sale”). The California City Facility Sale was completed concurrently with the parties’ entry into the California City Purchase Agreement.
The above summary of the California City Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the California City Purchase Agreement, which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.
Otay Mesa Facility Sale
On July 2, 2026, the Company entered into an Agreement of Purchase and Sale (the “Otay Mesa Purchase Agreement”) with Buyer, pursuant to which, and upon the terms and subject to the conditions set forth therein, the Company sold to Buyer its 1,994-bed Otay Mesa Detention Center in San Diego, California (the “Otay Mesa Facility”) and certain related assets for an aggregate purchase price of approximately $739.2 million, subject to certain adjustments as set forth in the Otay Mesa Purchase Agreement (the “Otay Mesa Facility Sale”). The Otay Mesa Facility Sale was completed concurrently with the parties’ entry into the Otay Mesa Purchase Agreement.
The above summary of the Otay Mesa Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Otay Mesa Purchase Agreement, which is filed herewith as Exhibit 10.2 and is incorporated herein by reference.
Relationships
The Company currently expects to continue to manage the California City Facility and the Otay Mesa Facility under the existing management contracts with U.S. Immigration & Customs Enforcement, a federal law enforcement agency under the Department of Homeland Security (“ICE”), related to each facility, although the terms of the management contracts may be modified to reflect the change in ownership. The Company can provide no assurance that it will continue to manage these facilities in the future, or that the terms of the existing management contracts will remain the same. ICE has the ability to terminate the management contracts for non-appropriation of funds or for convenience. The management contract for the California City Facility expires in August 2027, and the management contract for the Otay Mesa Facility expires in December 2029 and contains a five-year extension option.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K (this “Current Report”) contains statements as to the Company’s beliefs and expectations of the outcome of future events that are “forward-looking” statements as defined within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These include, but are not limited to, the risks and uncertainties associated with: (i) changes in government policy, legislation and regulations that affect utilization of the private sector for corrections, detention, and residential reentry services, in general, or the Company’s business, in particular, including, but not limited to, the continued utilization of the Company’s correctional and detention facilities by the federal government as a consequence of presidential executive orders, changes in how the federal government, including ICE, elects to use the Company’s detention capacity or otherwise procures alternative detention capacity, and the impact of any changes to immigration reform and sentencing laws (the Company does not, under longstanding policy, lobby for or against policies or legislation that would determine the basis for, or duration of, an individual’s incarceration or detention); (ii) the Company’s ability to obtain and maintain correctional, detention, and residential reentry facility management contracts because of reasons including, but not limited to, sufficient governmental appropriations, contract compliance, negative publicity and effects of inmate disturbances; (iii) changes in the privatization of the corrections and detention industry, the acceptance of the Company’s services, the timing of the opening of new facilities and the commencement of new management contracts (including the extent and pace at which new contracts are utilized), as
well as the Company’s ability to utilize available beds; (iv) the Company’s ability to successfully activate idle facilities in a timely manner in order to meet the growth in demand for the Company’s facilities and services from the federal government that has occurred as a result of changes in policies and actions of the current presidential administration, and to realize projected returns resulting therefrom; (v) general economic and market conditions, including, but not limited to, the impact governmental budgets can have on the Company’s contract renewals and renegotiations, per diem rates, and occupancy; (vi) fluctuations in the Company’s operating results because of, among other things, changes in occupancy levels; competition; contract renegotiations or terminations; inflation and other increases in costs of operations, including a rise in labor costs; fluctuations in interest rates and risks of operations; (vii) government budget uncertainty, the impact of debt ceilings and government shutdowns, including partial shutdowns, and changing budget priorities; (viii) the Company’s ability to successfully identify and consummate future development and acquisition opportunities, integrate their operations, and realize projected returns resulting therefrom; (ix) the availability of debt and equity financing on terms that are favorable to us, or at all; and (x) the intended use of proceeds from the transactions described in this Current Report. Except as required by law, the Company takes no responsibility for updating the information contained in this Current Report following the date hereof to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events.
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
The information set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.01.
| Item 7.01 | Regulation FD Disclosure. |
On July 6, 2026, the Company issued a press release announcing the California City Facility Sale and the Otay Mesa Facility Sale. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| 10.1* | Purchase and Sale Agreement with respect to California City Facility, between CoreCivic, Inc. and the United States of America, by and through the Department of Homeland Security, dated July 2, 2026. | |
| 10.2* | Purchase and Sale Agreement with respect to Otay Mesa Facility, between CoreCivic, Inc. and the United States of America, by and through the Department of Homeland Security, dated July 2, 2026. | |
| 99.1 | Press Release of the Company dated July 6, 2026. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
| * | Certain schedules and similar attachments have been omitted in reliance on Instruction 4 of Item 1.01 of Form 8-K and Item 601(a)(5) of Regulation S-K. The Company will provide, on a supplemental basis, a copy of any omitted schedule or attachment to the Securities and Exchange Commission or its staff upon request. Pursuant to Item 601(a)(6) of Regulation S-K, certain information has been redacted or omitted and marked by brackets and asterisks. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: July 6, 2026 | CORECIVIC, INC. | |||||
| By: | /s/ David M. Garfinkle | |||||
| David M. Garfinkle | ||||||
| Executive Vice President and Chief Financial Officer | ||||||
Exhibit 99.1
| News Release |
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| Contact: | Investors: Jeb Bachmann - Managing Director, Investor Relations - (615) 263-3024 | |
| Financial Media: David Gutierrez, Dresner Corporate Services - (312) 780-7204 |
CORECIVIC SELLS TWO DETENTION FACILITIES
BRENTWOOD, Tenn. – July 6, 2026 – CoreCivic, Inc. (NYSE: CXW) (CoreCivic or the Company) announced today that on July 2nd, 2026, it completed the sale of its 2,560-bed California City Detention Facility in California City, California (the California City Facility) and its 1,994-bed Otay Mesa Detention Center in San Diego, California (the Otay Mesa Facility) to the United States of America and its assigns, by and through the Department of Homeland Security for an aggregate gross sales price of $1.5 billion, including $732.6 million for the California City Facility and $739.2 million for the Otay Mesa Facility. These two purpose-built facilities were specifically designed to care for individuals in a secure environment. After federal and state income taxes of approximately $0.4 billion and transaction expenses, the Company anticipates its net proceeds from the asset sales to be approximately $1.1 billion.
The Company expects to use a portion of the net proceeds from the asset sales to
| • | Repay all or a portion of the outstanding indebtedness under the Company’s Bank Credit Facility, which currently has an outstanding balance of $270.0 million on the Revolving Credit Facility, $107.8 million on the Initial Term Loan, and $100.0 million on the Incremental Term Loan, and |
| • | Repay the remaining outstanding balance of $238.5 million of the Company’s 4.75% senior notes, which are scheduled to mature in October 2027 (the 4.75% Notes). |
The Company expects to use the remaining net proceeds for general corporate purposes, which may include additional debt repayments and share repurchases of the Company’s common stock. The credit agreement governing the Company’s Bank Credit Facility (the Credit Agreement) and the indenture (the 2029 Notes Indenture) governing the Company’s outstanding 8.25% senior notes due 2029 (the 8.25% Notes) limit our ability to make certain restricted payments, including share repurchases. However, the Company is permitted to make unlimited restricted payments (i) under the Credit Agreement, to the extent the Company’s consolidated secured leverage ratio (as defined therein) calculated on a pro forma basis after giving effect to such restricted payment would be equal to or less than 1.50 to 1.00 and no default exists thereunder, and (ii) under the 2029 Notes Indenture, to the extent the Company’s consolidated total leverage ratio (as defined therein) calculated on a pro forma basis after giving effect to such restricted payment would be equal to or less than 2.00 to 1.00.
The Company also expects to maintain balance sheet flexibility to pursue growth opportunities. These opportunities include, but are not limited to, potential acquisitions within the Company’s lines of business and those that provide complementary services provided such opportunities enhance the Company’s business, diversify the Company’s cash flows, and/or increase the services the Company offers to its customers, similar to the acquisition of Clinical Solutions Pharmacy completed on April 1, 2026.
5501 Virginia Way, Brentwood, Tennessee 37027, Phone: 615-263-3000
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The Company currently expects to continue to manage the California City Facility and the Otay Mesa Facility under the existing management contracts with Immigration & Customs Enforcement (ICE) related to each facility, although the terms of the management contracts may be modified to reflect the change in ownership. However, the Company can provide no assurance that it will continue to manage these facilities in the future, or that the terms of the existing management agreements will remain the same. As has always been the case, ICE has the ability to terminate the management contracts for non-appropriation of funds or for convenience. The management contract for the California City Facility expires in August 2027, and the management contract for the Otay Mesa Facility expires in December 2029 and contains a five-year extension option.
In addition to these asset sales, the Company has been in discussions with ICE about the potential acquisition of additional detention facilities from the Company. These discussions are in various stages, and the Company can provide no assurance that any additional sales will occur.
Patrick Swindle, CoreCivic’s President and Chief Executive Officer, commented, “We are pleased with the sales of these two mission-critical facilities for the Company’s government partner, which demonstrates the value of the Company’s underlying real estate portfolio, while reflecting our role as a long-term, flexible solutions provider to government. The sale of these facilities at what we believe is a fair valuation provides the Company with significant balance sheet flexibility and positions us well to grow the Company’s businesses and return value to its shareholders, while remaining a dependable partner for government.”
About CoreCivic
CoreCivic is a diversified, government-solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. CoreCivic provides a broad range of solutions to government partners that help build safer, healthier, and more productive communities one person at a time through residential corrections, detention, and reentry management, adjacent service offerings that include pharmaceutical, transportation, and alternatives to incarceration, and government real estate solutions. CoreCivic is the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and one of the largest operators of such facilities in the United States. CoreCivic has been a flexible and dependable partner for government for more than 40 years. CoreCivic’s employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good. Learn more at www.corecivic.com.
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Forward-Looking Statements
This press release contains statements as to our beliefs and expectations of the outcome of future events that are “forward-looking” statements as defined within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These include, but are not limited to, the risks and uncertainties associated with: (i) changes in government policy, legislation and regulations that affect utilization of the private sector for corrections, detention, and residential reentry services, in general, or our business, in particular, including, but not limited to, the continued utilization of our correctional and detention facilities by the federal government as a consequence of presidential executive orders, changes in how the federal government, including ICE, elects to use our detention capacity or otherwise procures alternative detention capacity, and the impact of any changes to immigration reform and sentencing laws (we do not, under longstanding policy, lobby for or against policies or legislation that would determine the basis for, or duration of, an individual’s incarceration or detention); (ii) our ability to obtain and maintain correctional, detention, and residential reentry facility management contracts because of reasons including, but not limited to, sufficient governmental appropriations, contract compliance, negative publicity and effects of inmate disturbances; (iii) changes in the privatization of the corrections and detention industry, the acceptance of our services, the timing of the opening of new facilities and the commencement of new management contracts (including the extent and pace at which new contracts are utilized), as well as our ability to utilize available beds; (iv) our ability to successfully activate idle facilities in a timely manner in order to meet the growth in demand for our facilities and services from the federal government that has occurred as a result of changes in policies and actions of the current presidential administration, and to realize projected returns resulting therefrom; (v) general economic and market conditions, including, but not limited to, the impact governmental budgets can have on our contract renewals and renegotiations, per diem rates, and occupancy; (vi) fluctuations in our operating results because of, among other things, changes in occupancy levels; competition; contract renegotiations or terminations; inflation and other increases in costs of operations, including a rise in labor costs; fluctuations in interest rates and risks of operations; (vii) government budget uncertainty, the impact of debt ceilings and government shutdowns, including partial shutdowns, and changing budget priorities; (viii) our ability to successfully identify and consummate future development and acquisition opportunities, integrate their operations, and realize projected returns resulting therefrom; (ix) the availability of debt and equity financing on terms that are favorable to us, or at all; and (x) the potential for additional sales and intended use of proceeds from the asset sales described in this press release. Other factors that could cause operating and financial results to differ are described in the filings we make from time to time with the Securities and Exchange Commission.
We take no responsibility for updating the information contained in this press release following the date hereof to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events or for any changes or modifications made to this press release or the information contained herein by any third-parties, including, but not limited to, any wire or internet services, except as may be required by law.
This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, including the 4.75% Notes or the 8.25% Notes, nor shall it constitute a notice of redemption under the indenture governing the 4.75% Notes or the 2029 Notes Indenture, nor shall there be any offer, solicitation or sale of the 4.75% Notes, the 8.25% Notes or any other securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.
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