Spirit Realty gets $800 million loan in three-, five-year tranches

By Marisa Wong

Los Angeles, Aug. 22 – Spirit Realty Capital, Inc. operating partnership Spirit Realty, LP entered into an unsecured term loan agreement on Aug. 22 for an initial aggregate amount of $800 million, comprised of a $300 million three-year tranche due Aug. 22, 2025 and a $500 million five-year tranche due Aug. 20, 2027, according to an 8-K filing with the Securities and Exchange Commission.

The term loan also includes an accordion feature to increase the available term loans in the aggregate amount of $200 million, such that the term loans will not exceed $1 billion.

The term loans will bear interest at a term rate benchmark plus an applicable margin ranging from 80 basis points to 160 bps, depending on the operating partnership’s credit rating; provided that upon the achievement of a certain leverage ratio, as long as the credit rating is not lower than BBB/Baa2, the applicable margins will be based on the credit rating of BBB+/Baa1/BBB+.

The starting rate is one-month SOFR plus an 85 bps spread.

In anticipation of closing the term loan, Spirit previously entered into interest swap agreements, effectively fixing the interest rate at 3.45% for the 2027 maturity and 3.59% for the 2025 maturity, resulting in a weighted average interest rate of 3.50% for the total $800 million facility, according to a press release

The operating partnership is required to comply with the following financial covenants: maximum total debt to total asset value ratio not to exceed 0.60 to 1.00; ratio of adjusted EBITDA to fixed charges ratio not less than 1.50 to 1.00; maximum secured debt to total asset value ratio not to exceed 0.40 to 1.00; ratio of unencumbered NOI to unsecured interest expense not less than 1.75 to 1.00; and maximum unsecured debt to unencumbered asset value ratio not to exceed 0.60 to 1.00.

JPMorgan Chase Bank, NA is the administrative agent.

JPMorgan, Capital One, NA, Huntington National Bank, Mizuho Bank, Ltd., Regions Capital Markets, TD Bank, NA and Truist Securities, Inc. are joint lead arrangers and joint bookrunners.

Fifth Third Bank, NA is joint lead arranger.

Capital One, Huntington, Mizuho, Regions Bank, TD Bank and Truist Bank are syndication agents.

Fifth Third is documentation agent.

Bank of America, NA, Bank of Nova Scotia, Royal Bank of Canada and Wells Fargo Bank, NA are managing agents.

The real estate investment trust is based in Dallas.

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