DALLAS, Jan. 16, 2018 /PRNewswire/ -- Spirit Realty
Capital, Inc. (NYSE: SRC) ("Spirit" or the "Company") announced
today that it has funded $35 million
(the "B-1 Term Loan") into an existing credit facility ("Term
B Loan") of Shopko Stores Operating Co., LLC and its affiliates
("Shopko"), and concurrently entered into an amendment to Shopko's
Master Lease. The Term B Loan facility is part of Shopko's
$784 million asset backed lending
facility and shares the collateral.
The Master Lease amendment requires Shopko to provide to Spirit
annual and quarterly financial statements that are compliant with
the U.S. Securities and Exchange Commission (the "SEC") rules.
Further, the amendment modifies certain provisions of the Master
Lease including provisions related to assignment by Tenant,
subletting by Tenant, sale by Landlord and rent payment date, and
specifies a maximum three-month deferred non-consecutive rent
period with associated interest charges. Spirit's B-1 Term Loan
bears interest at a rate of 12% per annum, and along with the
existing Term B Loan, matures in 2020 and is secured by Shopko's
assets in their $784 million asset
backed lending facility.
"We are very pleased with the outcome of our continued
conversations with the team at Shopko as we seek to maximize the
value of our Shopko assets," stated Jackson
Hsieh, President and Chief Executive Officer of Spirit. "As
Shopko has executed on their strategy to improve operations, which
resulted in strong results for the important holiday season, we
reached an agreement to join their existing lender group and
provided Shopko $35 million for a two
year term at a rate that we believe provides an attractive return
for Spirit shareholders. In exchange, we amended our Master Lease
to define a limited rent deferral period, which maintains our
rental rate while providing Shopko with incremental flexibility,
and most importantly, to gain access to quarterly and audited
annual financial statements from Shopko, which we believe provides
immediate, significant incremental visibility and over the long
term, far greater optionality with respect to our ability to
transact that portfolio. Our previously announced spin-off
transaction was not dependent upon Spirit amending the Master Lease
or funding the term loan."
On January 16, 2018, Spirit
received a letter from Shopko providing an update on Shopko's
select financial results. For the nine week holiday period ended
December 30, 2017, EBITDA grew by
18%, Main Store Gross Margins improved by over 250 basis points and
comp Main Store Sales (excluding the impact of lower clearance
sales) were down by 0.7%, in each case, compared to the
corresponding period in the prior year. A copy of the letter has
been posted to the investor relations section of Spirit's
website.
About Spirit Realty Capital
Spirit Realty Capital,
Inc. (NYSE: SRC) is a premier net-lease real estate investment
trust (REIT) that primarily invests in high-quality, operationally
essential real estate, subject to long-term, net leases. Over the
past decade, Spirit has become an industry leader and owner of
income-producing, strategically located retail, industrial and
office properties providing superior risk adjusted returns and
steady dividend growth for our shareholders.
As of September 30, 2017, our
diversified portfolio was comprised of 2,511 properties, including
properties securing mortgage loans made by the Company. Our
properties, with an aggregate gross leasable area of approximately
49.7 million square feet, are leased to approximately 421 tenants
across 49 states and 30 industries.
Forward-looking and Cautionary Statements
This press
release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 and other
federal securities laws. These forward-looking statements can be
identified by the use of words such as "expect," "plan," "will,"
"estimate," "project," "intend," "believe," "guidance," and other
similar expressions that do not relate to historical matters. These
forward-looking statements are subject to known and unknown risks
and uncertainties that can cause actual results to differ
materially from those currently anticipated due to a number of
factors, which include, but are not limited to, Spirit's continued
ability to source new investments, risks associated with using debt
to fund Spirit's business activities (including refinancing and
interest rate risks, changes in interest rates and/or credit
spreads, changes in the price of our common stock, and conditions
of the equity and debt capital markets, generally), unknown
liabilities acquired in connection with acquired properties or
interests in real-estate related entities, general risks affecting
the real estate industry and local real estate markets (including,
without limitation, the market value of our properties, the
inability to enter into or renew leases at favorable rates,
portfolio occupancy varying from our expectations, dependence on
tenants' financial condition and operating performance, and
competition from other developers, owners and operators of real
estate), the financial performance of our retail tenants and the
demand for retail space, particularly with respect to challenges
being experienced by general merchandise retailers, potential
fluctuations in the consumer price index, risks associated with our
failure to maintain our status as a REIT under the Internal Revenue
Code of 1986, as amended, risks and uncertainties related to the
completion and timing of Spirit's proposed spin-off of assets that
collateralize Master Trust 2014, almost all the properties that
Spirit leases to Shopko and certain of its affiliates, as well as
certain other assets , and the impact of the spin-off on Spirit's
business, and other additional risks discussed in Spirit's most
recent filings with the SEC, including its Annual Report on Form
10-K. Spirit expressly disclaims any responsibility to update or
revise forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
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SOURCE Spirit Realty Capital, Inc.