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Opinion
Brian Chappatta

Which Bank Will Dare to Finance Alabama’s Prisons?

After Barclays dropped out, the state wants assurances that its next bond underwriter won’t do the same. That leaves few options.

Financing upgraded prisons is a difficult proposition.

Financing upgraded prisons is a difficult proposition.

Photographer: Timothy A. Clary/AFP/Getty Images

Alabama just won’t give up on selling bonds to finance prison projects.

In April, Barclays Plc backed out as lead underwriter of a large municipal-bond deal for two Alabama prisons owned by CoreCivic Inc., a giant in the private-prison industry. It really had no excuse for the drama: The bank had previously pledged to no longer provide new financing to such companies and seemed to try to use the state’s role as a workaround. Soon afterward, Stifel Financial Corp. said it was no longer involved. By September, the state’s corrections department terminated its 30-year lease with CoreCivic, and lawmakers advanced a plan to use federal aid to build the new facilities.