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Barclays no longer plans to raise $850 million for private-prison manager CoreCivic through Alabama.
Activist investors pushed back, citing Barclays promise that it would not fund private prisons.
KeyBank followed suit, as bulge-bracket banks weigh the ESG risks of prison funding.
Barclays has withdrawn a controversial $850 million financing for the state of Alabama and private-prison manager CoreCivic, just hours before the deal was expected to wrap up in the public and private bond markets.
The transaction, which reignited a debate over big banks role in the US incarceration system, was slated to fund two new correctional facilities that were to be constructed by private-prison operator CoreCivic.
CoreCivic to move ahead on Alabama prison bonds after losing underwriters Reuters 2 hrs ago
By Karen Pierog and Ross Kerber
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April 19 (Reuters) - U.S. private prison operator CoreCivic Inc said on Monday it expects to move forward with a bond sale for Alabama prisons after two of three underwriters dropped out of the deal, which had come under attack by social justice activists.
Barclays Plc, the senior underwriter for the taxable bond deal originally sized at $633.5 million, and KeyBanc Capital Markets, a co-manager, confirmed they were no longer participating in the bond pricing in the U.S. municipal market.
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