Press Release|Public Finance
KBRA Affirms BB Rating with Stable Outlook for Imperial Regional Detention Facility Project Senior Lien Refunding Revenue Bonds (Federally Taxable) Series 2014
30 Aug 2024 | New York
KBRA affirms the long-term rating of BB with a Stable Outlook for the Industrial Development Authority of the County of La Paz, Arizona (Imperial Regional Detention Facility Project) Senior Lien Refunding Revenue Bonds (Federally Taxable) Series 2014.
Key Credit Considerations
The rating affirmation reflects the following key credit considerations:
Credit Positives
- ICE reduced occupancy at Imperial and other immigration detention facilities in response to the pandemic, but utilization has recovered, and the Project performed soundly even through the period of reduced capacity due to ICE’s minimum bed payment guarantee.
- The modern, secure facility is well suited to ICE detainment requirements and is located in an area of significant border activity.
- ICE-owned facilities are sufficient to meet only a small portion of the agency’s detainment needs, creating a structural need for private detention services.
Credit Challenges
- Significant political opposition to private prison and immigrant detention present risks to successful operation of the facility through maturity of bonds.
- ICE has wide discretion to terminate the detainee housing agreement and deficiencies in performance by MTC specifically could result in immediate termination.
Rating Sensitivities
For Upgrade
- A rating upgrade is not anticipated.
For Downgrade
- Termination of the ICE detainee housing agreement or reduction in the minimum bed day guarantee.
- Change in federal policy ending the use of private immigration detention facilities.
To access rating and relevant documents, click here.
Click here to view the report.