On February 22, 2021, Spirit Realty Capital, Inc. (the “Company”) and Spirit Realty, L.P. (the “Operating Partnership”) entered into an underwriting agreement with BofA Securities, Inc., RBC Capital Markets, LLC and Wells Fargo Securities, LLC, as representatives of the several underwriters named in the underwriting agreement with respect to an underwritten public offering of $450,000,000 aggregate principal amount of the Operating Partnership’s 2.100% Senior Notes due 2028 (the “2028 Notes”) and $350,000,000 aggregate principal amount of the Operating Partnership’s 2.700% Senior Notes due 2032 (the “2032 Notes” and together with the 2028 Notes, the “Notes”), each of which are to be fully and unconditionally guaranteed by the Company. The closing of the sale of the Notes is expected to occur on March 3, 2021, subject to the satisfaction of customary closing conditions.
The 2028 Notes will be issued pursuant to a base indenture (the “Base Indenture”), dated as of August 18, 2016, by and among the Operating Partnership, as issuer, and U.S. Bank National Association, as trustee, to be supplemented by a sixth supplemental indenture (together with the Base Indenture, the “2028 Notes Indenture”), by and among the Operating Partnership, as issuer, the Company, as guarantor, and U.S. Bank National Association, as trustee, to be dated as of the closing date.
The 2032 Notes will be issued pursuant to the Base Indenture, to be supplemented by a seventh supplemental indenture (together with the Base Indenture, the “2032 Notes Indenture”), by and among the Operating Partnership, as issuer, the Company, as guarantor, and U.S. Bank National Association, as trustee, to be dated as of the closing date. The 2028 Notes Indenture and the 2032 Notes Indenture will be filed with the Securities and Exchange Commission on a subsequent Current Report on Form 8-K.
The Notes are being offered pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission on October 13, 2020 (Registration Nos. 333-249459 and 333-249459-01), a base prospectus, dated October 13, 2020, and a prospectus supplement, dated February 22, 2021, filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended.
The Company intends to use the proceeds from the offering of the Notes to repay or repurchase indebtedness, including repaying the Company’s 3.75% convertible notes due 2021 at maturity, repaying $207.1 million of CMBS loans (plus the yield maintenance amounts) and temporarily repaying $259.5 million of borrowings outstanding under the Operating Partnership’s revolving credit facility, and for general corporate purposes, which may include repaying or repurchasing other indebtedness, working capital, acquisitions and capital expenditures. In connection with the repayment of the CMBS loans, the Company expects to pay approximately $25.8 million of yield maintenance and incur a loss on debt extinguishment of approximately $27.5 million (approximately $1.7 million of which will be a non-cash charge associated with the write off of unamortized deferred financing costs). Such loss on debt extinguishment is not expected to impact the Company’s adjusted funds from operations.
The foregoing description of the underwriting agreement is qualified in its entirety by the underwriting agreement attached as Exhibit 1.1 to this Current Report on Form 8-K and incorporated herein by reference.
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this Current Report on Form 8-K, the words “estimate,” “anticipate,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “seek,” “approximately” or “plan,” or the negative of these words or similar words or phrases that are predictions of or indicate future events or trends and which do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions of management. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise, and the Company may not be able to realize them. The Company does not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following risks and uncertainties, among others, could cause actual results and future events to differ materially
