Prisons Built With Junk-Bonds Get Their Ratings Yanked by S&P
- Marshals Service, Bureau of Prisons haven’t responded: S&P
- Regular contact with federal agencies is important, S&P said
This article is for subscribers only.
In 2015, a riot broke out at the detention center in Willacy County, Texas, as inmates protested flooding toilets, rodents and overcrowding in the facility overseen by Management & Training Corp. That prompted the Federal Bureau of Prisons to pull out its inmates and the prison closed, shutting off some of the revenue needed to repay its debts.
The closure shows the level of volatility that investors owning prison bonds can encounter. In fact, Wall Street analysts still aren’t sure how to gauge the risk of a default on $13 million of outstanding debt tied to another Willacy County lockup for an entirely different reason.