S&P changes Spirit Realty view to positive

S&P said it affirmed its BBB- issuer credit rating on Spirit Realty Capital Inc. and Spirit Realty LP.

The outlook was revised to positive from stable.

At the same time, the agency affirmed the BBB- issue-level rating on the company's senior unsecured notes.

“The positive outlook revision reflects our favorable view of the completed spinoff of Spirit MTA,” S&P said in a news release.

“The move reduced Spirit's scale but greatly improved its tenant mix by eliminating exposure to troubled retailer Shopko (not rated), which represented 7.9% of annualized rents as of March 31, 2018.

“Moreover, the transaction is expected to materially improve leverage, with S&P-adjusted debt to EBITDA projected in the high-5x to low-6x area on a sustained run-rate basis (from 6.9x at year-end 2017) and with the company committed to maintaining its stronger balance sheet.”

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