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PALM BEACH GARDENS, FL-A newly formed subsidiary of Correctional Properties Trust has issued $57.5 million in taxable mortgage revenue bonds to finance the acquisition and the refinancing of two prisons in North Carolina.

Correctional Properties North Carolina Prison Finance, a subsidiary of the Palm Beach Gardens-based real estate investment trust, recently acquired the Pamlico Correctional Facility in Bayboro, NC, for about $24.1 million, plus closing costs. A medium-security prison, the 576-cell Bayboro facility is leased to the state of North Carolina under a long-term, triple-net lease.

The newly formed subsidiary also used part of the proceeds to refinance the debt on the Mountain View Correctional Facility, a medium-security prison with 576 cells in Spruce Pine, NC. Earlier this year, the parent company acquired the facility for about $24.9 million, plus closing costs. The state also leases this facility under long-term, triple-net lease.

Announcement of the bond issue spurred a mini rally for shares in the publicly traded REIT. Shares closed up $22 cents on Friday and then up $42 cents on Monday at $14.64 cents on volume of 45,900. The closing price exceeded the prior 52-week high of $14.25 cents, with shares trading as low as $9 each over the same time period.

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