Subsidiaries of Spirit Realty Capital have issued $510m of mortgage notes under the real estate investment trust company’s Spirit Master Funding securitization platform.
The net-lease mortgage notes, rated A+ by Standard & Poor’s, consist of $150m of Class A-1 notes and $360m of Class A-2 notes.
The notes match-fund the firm’s single tenant commercial acquisitions, which make up the REIT’s primary business, while being exempt from registration under the Securities Act and additional rigors associated with the CMBS market.
“Our Master Funding program continues to provide us with an efficient platform to lock in attractively priced, fixed-rate capital to match-fund our acquisitions of operationally essential real estate net leased to quality, middle market companies,” said Thomas Nolan, Jr., chairman and CEO of Spirit Realty Capital, in a written statement.
The Class A-1 notes carry a 3.5% interest rate and an anticipated repayment date of January 2020; while the Class A-2 notes have a 4.63% rate with scheduled amortization beginning 36 months after issuance with an anticipated repayment date in January 2030. That equates to a 4.42% blended coupon, with a 9.4-year weighted average life.
Spirit will use the note sale proceeds to repay borrowings under its revolving credit facility, to fund future acquisition activity and for general corporate purposes. The notes, offered to qualified institutional buyers, are payable from their assets, which consist primarily of the fee titles on commercial real estate properties, the issuers’ rights in net leases of those properties, as well as mortgage loans secured by fee titles and all future payments.