ROLLING PLAINS DETENTION FACILITY:

Haskell, Texas

In October of 2008, IPPD acquired the Rolling Plains Detention Facility from the City and County of Haskell, Texas (“Haskell”). The original construction of the 550 bed correctional facility was financed by Haskell through three separate public bond issuances. Sparked by a desire to more effectively manage its balance sheet, as well as a need to eliminate recourse liability that was inherent in one of the outstanding bonds, Haskell contracted with IPPD to purchase the facility and defease* the outstanding bonds. Through this structured sale, Haskell was able to monetize some of their debt and improve their balance sheet, as well as produce supplemental cash from the sale proceeds. This result was precisely what Haskell set out to achieve; they expanded their ability to explore additional projects while also eliminating the recourse liability that is often present in leveraged real estate ownership.

The 550 bed correctional facility is currently leased to Emerald Correctional Management LLC under a triple-net lease. Emerald operates the Facility under a service contract with the Bureau of Immigration and Customs Enforcement and the City and County of Haskell. It is anticipated that the facility will be expanded in the near future; a project that will be solely financed by IPPD.

*Defeasance is the process through which debt can be retired when prepayment is not allowed. The debt holders are satisfied through purchasing government securities that replicate the exact cash flows that the bonds produced holders. The bond issuer is released from their obligation and the debt holders have a risk free stream of cash flows.

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