By Paul A. Harris
Portland, Ore., June 3 – Service Properties Trust priced an upsized $800 million issue of split-rated five-year senior notes (Baa3/BB+) at par to yield 7½% on Wednesday, according to a market source.
BofA Securities Inc. and Wells Fargo Securities LLC were the active bookrunners.
The deal, which was upsized from $500 million, was heard to be playing to as much as $7 billion of demand and soared into the secondary market where the bonds were trading at 104¼ bid, 104¾ offered late Wednesday afternoon, traders said.
The yield printed through yield talk in the 7¾% area. Earlier talk was in the 8% area.
The transaction was run in a collaborative effort by the investment-grade and high-yield syndicates, sources said.
The notes will be traded on the high-yield desk, a trader said.
Proceeds will be used to repay borrowings under the company’s revolving credit facility.
Service Properties Trust is a Newton, Mass.-based real estate investment trust that owns a portfolio of hotels and net lease service and necessity-based retail properties.
| Issuer: | Service Properties Trust
|
| Amount: | $800 million, increased from $500 million
|
| Tenor: | Sept. 15, 2025
|
| Securities: | Senior notes
|
| Active bookrunners: | BofA Securities Inc. (bill and deliver) and Wells Fargo Securities LLC
|
| Coupon: | 7½%
|
| Price: | Par
|
| Yield: | 7½%
|
| Call protection: | Make-whole call until three months prior to maturity, then callable at par, otherwise non-callable
|
| Trade date: | June 3
|
| Settlement date: | June 17
|
| Ratings: | Moody's: Baa3
|
| S&P: BB+
|
| Distribution: | SEC registered
|
| Price talk: | 7¾% area
|
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