Vacant Texas Detention Center in Default
DALLAS - The Willacy County Detention Center is in default on $78.5 million of bonds used to build the private, for-profit Texas lockup, according to trustee U.S. Bank National Association.
In a filing on the Municipal Securities Rulemaking Board's EMMA website, the trustee reported that "the issuer has no present ability to generate project revenue."
A month after giving the issuer time to solve the problem, the default notice was sent, according to the filing.
Standard & Poor's on March 25 downgraded the detention center to CCC-plus from BBB after the facility lost its operator. The Federal Bureau of Prisons cancelled its contract with operator Management Training Corp. after inmates took over the 2,800-bed facility and caused enough damage to make the center uninhabitable.
The outlook on the rating is negative.