HSBC Holdings plc is a British multinational bank holding and financial services company headquartered in London. Through its subsidiaries, HSBC conducts banking operations in 64 countries and territories. In 2022, the company generated $55.3 billion in revenue and, as of 2023, it is the eighth largest bank in the world based on total assets.
Past Financing of Private Prison Companies
HSBC has been identified as one of several major financiers of private prison and immigrant detention companies, having provided guarantee lines of credit and bond underwriting services to CoreCivic and GEO Group. While other major private prison financiers announced in 2019 that they would exit their relationships with private prison companies, HSBC has made no such announcement as of August 2023.
In 2019, GEO Group entered into an amended credit agreement, set to expire in 2024. This agreement effectively replaced the company's 2014 credit facility of the same amount, consisting of a $900 million revolving line of credit and a $792 million term loan. As part of a syndicate of banks, HSBC served as a lender under the original agreement, contributing an undisclosed amount of money to the deal.
In 2016, GEO Group extended a Letter of Offer with HSBC subsidiary bank HSBC Bank Australia Limited, establishing a $78.1 million bank guarantee line for work related to Ravenhall Correctional Centre, a 1,300-bed private prison in Australia. This deal allowed GEO Group to provide letters of credit to assure performance of certain obligations related to the development and operation of the prison.
HSBC also served as an underwriter for the following CoreCivic bond offering:
- April 2013: CoreCivic issued two sets of bonds—one set totaling $325 million, with a maturity date of 2020, and another set totaling $350 million, with a maturity date of 2023. As part of a syndicate of banks, HSBC underwrote both sets of bonds; however, SEC filings do not disclose the proportion of bonds underwritten by the bank.
Discerning the Company's Role in Current Credit Agreements
As of September 2023, HSBC might still be involved in the following bond agreements with GEO Group:
- April 2016: GEO Group issued $350 million of bonds, with a maturity date of 2026. As part of a syndicate of banks, HSBC underwrote $14 million worth of these bonds.
- September 2014: GEO Group issued $250 million of bonds, with a maturity date of 2024. As part of a syndicate of banks, HSBC underwrote $18.8 million worth of these bonds.
In August 2022, GEO Group completed an offer to exchange/purchase certain outstanding notes, revolving credit loans, and term loans from certain lenders. As part of this agreement, GEO Group exchanged its outstanding bonds due 2023, 2024, and 2026 for newly issued bonds due 2028. SEC filings do not disclose whether HSBC is still involved in any of these agreements.
In September 2022, GEO Group sold its equity investment interest in Ravenhall Correctional Centre to a third party, as well as its shares in its relevant Australian subsidiaries. As part of the sale, the private prison company transferred its debt to the buyer.