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06/09/2003 - CEC Completes Refinancing

Washington, Jun 9 -

CEC Completes Refinancing




ROSELAND, NJ (June 9, 2003)—Community Education Centers (CEC) Inc. has announced a series of refinancing transactions that will allow the company to finance new ventures and take advantage of growth opportunities throughout the country. These transactions include a $46 million refinancing of current debt with a consortium of three banks, a sale/leaseback transaction with Correctional Properties Trust valued at $21 million and an issuance of $30 million in subordinated debt.

Under the terms of the $46 million refinancing agreement, CEC was issued a $10 million line of credit for future development. The three banks participating in the credit agreement include Comerica, GE Capital and Merrill Lynch. Comerica, acting as lead institution, has been one of CEC’s banks for the last 6 years.

“Community Education Centers is pleased to conclude this transaction, which restructures our long-term debt and provides us with significant capital for future growth,” said John J. Clancy, President and CEO of CEC.

The sale/leaseback transaction with Correctional Properties Trust, a Real Estate Investment Trust (REIT), was for CEC’s Delaney Hall facility in Newark, New Jersey. CEC has entered into a ten-year lease on the Delaney Hall property with three 5-year renewal options and will continue to operate the Newark based treatment facility. Delaney Hall is a 726-bed residential treatment facility that serves Essex and Union County inmates and state parole violators.

“The sale and leaseback of Delaney Hall is an important step toward providing capital to fund our continued growth. As a privately held company, access to capital is critical to our ability to develop new facilities and expand our correctional services. We are pleased to have established this important relationship with Correctional Properties Trust,” said Mr. Clancy.

In addition, CEC is expected to close on $30 million in sub-debt in July.

CEC plans to utilize the new capital to construct a 750-bed facility in Colorado Springs, Colorado and to expand the Bo Robinson facility in Trenton, New Jersey by 100 beds. The company also plans to expand Delaney Hall in Newark and Talbot Hall in Kearny, New Jersey.

Community Education Centers, a Roseland-based national company, is a leading provider of rehabilitative services to the criminal justice population. CEC provides a variety of comprehensive treatment services to adults and juveniles through its 20 locations in eight states, ranging from residential, secured treatment to work release to electronic monitoring.