Spirit Realty to sell $550 million convertible notes in two tranches

By Rebecca Melvin

New York, May 13 - Spirit Realty Capital Inc. plans to price $550 million of convertible senior notes in two series after the market close Wednesday, including $350 million of five-year notes and $200 million of seven-year notes, according to a syndicate source.

The tranche maturing May 19, 2019 has an over-allotment option for $52.5 million additional notes and was being talked at a coupon of 2.875% to 3.375% with an initial conversion premium of 17.5% to 22.5%.

The tranche maturing May 15, 2021 has an over-allotment option for a further $30 million of notes and was being talked at a 3.75% to 4.25% coupon and a 17.5% to 22.5% premium.

Spirit Realty also plans to price 23 million shares of common stock.

Joint bookrunners of the registered, off-the-shelf convertibles deal are Morgan Stanley, J.P. Morgan Securities LLC and RBC Capital Markets.

Proceeds will be used to defease some of the company's mortgage debt, to repay an outstanding balance under its revolving credit facility, to fund potential further acquisitions and for general corporate purposes.

Scottsdale, Ariz.-based Spirit is a real estate investment trust focused on primarily commercial properties.

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