Item 1.01 Entry into a Material Definitive Agreement.
The information set forth in Item 2.03 of this Current Report on Form8-K is incorporated by reference into this Item 1.01.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant.
On June 27, 2019, Spirit Realty, L.P. (the “Issuer”), a Delaware limited partnership and subsidiary of Spirit Realty Capital, Inc. (the “Guarantor”), issued $400.0 million aggregate principal amount of its 4.000% Notes due 2029 (the “Notes”). The Notes are fully and unconditionally guaranteed by the Guarantor. The terms of the Notes are governed by an indenture, dated as of August 18, 2016 (the “Base Indenture”), by and between the Issuer and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by a second supplemental indenture, dated as of June 27, 2019 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), by and among the Issuer, the Guarantor and the Trustee. The Indenture contains various restrictive covenants, including limitations on the ability of the Guarantor and its subsidiaries, including the Issuer, to incur additional indebtedness and requirements to maintain a pool of unencumbered assets. Copies of the Base Indenture and the Supplemental Indenture, including the form of Notes and the guarantee, the terms of which are incorporated herein by reference, are attached as Exhibits 4.1 and 4.2, respectively, to this Current Report on Form8-K.
The purchase price paid by the underwriters for the Notes was 99.274% of the principal amount thereof. The Notes are the Issuer’s senior unsecured obligations and rank equally in right of payment with all of the Issuer’s other existing and future senior unsecured indebtedness. However, the Notes are effectively subordinated in right of payment to all of the Issuer’s existing and future mortgage indebtedness and other secured indebtedness (to the extent of the collateral securing the same) and to all existing and future indebtedness and other liabilities, whether secured or unsecured, of the Issuer’s subsidiaries and of any entity the Issuer accounts for using the equity method of accounting and to all equity not owned by the Issuer, if any, in its subsidiaries and of any entity the Issuer accounts for using the equity method of accounting. The Notes bear interest at 4.000% per annum. Interest is payable on January 15 and July 15 of each year, beginning January 15, 2020, until the maturity date of July 15, 2029.
The Notes will be redeemable in whole at any time or in part from time to time, at the Issuer’s option, at a redemption price equal to the sum of:
| | • | | an amount equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest and liquidated damages, if any, up to, but not including, the redemption date; and |
| | • | | a make-whole premium calculated in accordance with the Indenture. |
Notwithstanding the foregoing, if any of the Notes are redeemed on or after April 15, 2029 (three months prior to the maturity date of the Notes), the redemption price will not include a make-whole premium.
Certain events are considered events of default, which may result in the accelerated maturity of the Notes, including:
| | • | | default for 30 days in the payment of any installment of interest under the Notes; |
| | • | | default in payment of the principal amount or redemption price due with respect to the Notes, when the same becomes due and payable; |
| | • | | the guarantee of the Guarantor is not (or is claimed by the Guarantor in writing to the trustee not to be) in full force and effect (other than in accordance with the terms of the Indenture) with respect to the Notes; |
