Hospitality Properties Trust (NasdaqGS:HPT) signed a definitive agreement to acquire Master Trust 2014 owned properties of Spirit MTA REIT (NYSE:SMTA) and three assets of Spirit Realty Capital, Inc. (NYSE:SRC) for $2.4 billion on June 2, 2019. Spirit MTA REIT will sell the properties held in its Master Trust 2014 for $2.35 billion and Spirit Realty Capital will sell its three assets for $55 million. The consideration will be paid in cash. The consideration is subject to customary adjustments and proration's, plus certain debt prepayment penalties associated with the redemption of notes. The transaction excludes Spirit MTA's assets leased to certain bankrupt tenants. In case of termination, Spirit MTA will pay a termination fee of $11.4 million. In connection with the financing of the transaction, Hospitality Properties Trust has obtained commitments from Bank of America, N.A., BofA Securities, Inc., Citigroup, Morgan Stanley Senior Funding, Inc., RBC Capital Markets and Wells Fargo Securities LLC. As per the commitment, a senior unsecured term loan facility would be provided to Hospitality Properties Trust, under which Hospitality Properties Trust may borrow up to $2 billion. Hospitality Properties Trust may use the proceeds from this term loan facility, borrowings under its existing revolving credit facility and proceeds from the sale of certain assets and/or proceeds from the issuance of new unsecured notes to finance the transaction.

The portfolio being sold had annual rent of $172 million as of March 31, 2019. The transaction is subject to approval by Spirit MTA's shareholders in a meeting to be held on September 4, 2019 and other customary conditions. The transaction does not require Hospitality Properties Trust's shareholders' vote. The transaction has been unanimously approved by the Board of Trustees of Hospitality Properties Trust and Spirit MTA. The transaction has been approved by shareholders of Spirit MTA REIT. The transaction is expected to close in the third quarter of 2019. As of June 3, 2019, the transaction is expected to close on in the later part or end of the third quarter of 2019. As of August 5, 2019, the transaction is expected to close on September 20, 2019. A portion of the net proceeds of the transaction will be used by Spirit MTA to pay a termination fee (estimated to be approximately $48 million) to external manager in connection with the termination of management agreement, repurchase at par ($150 million), plus any accrued but unpaid dividends, the series A preferred shares of SMTA and repay at par ($5.1 million) plus a make-whole premium and any accrued but unpaid dividends, the preferred shares issued by Spirit MTA SubREIT, Inc., subsidiary of Spirit MTA. The transaction is expected to be accretive to annualized normalized funds from operations, or FFO, per share in 2020. Laurie A. Grasso and Steven M. Haas of Hunton Andrews Kurth LLP acted as legal advisor for Hospitality Properties Trust. Philip Richter, Erica Jaffe, Darren A. Littlejohn, J. Christian Nahr, Steven G. Scheinfeld, Michael C. Keats, Matthew D. Parrott, Brad Eric Scheler, Peter B. Siroka, Alan S. Kaden, David M. McDonald and Melissa A. Meyrowitz of Fried, Frank, Harris, Shriver & Jacobson LLP acted as legal advisor for Spirit MTA REIT. Barclays Capital Inc. acted as financial advisor for Spirit MTA REIT and provided fairness opinion as well. BofA Securities, Inc. acted as exclusive financial advisor to Hospitality Properties Trust. David Slotkin of Morrison & Foerster LLP acted as legal advisor to BofA Securities Inc. Cleary Gottlieb Steen & Hamilton LLP acted as legal advisor to Barclays Capital Inc.

Hospitality Properties Trust (NasdaqGS:HPT) completed the acquisition of Master Trust 2014 owned properties of Spirit MTA REIT (NYSE:SMTA) and three assets of Spirit Realty Capital, Inc. (NYSE:SRC) on September 20, 2019. In addition to the purchase price, Hospitality Properties paid $82.1 million of prepayment penalties related to SMTA's extinguishment of the existing mortgage debt on the portfolio. Hospitality Properties funded the transaction with net proceeds from its recently completed $1.7 billion unsecured senior notes offering and by drawing on its revolving credit facility. Hospitality Properties Trust will change its name to "Service Properties Trust". Hospitality Properties Trust's common shares will continue to be listed for trading on the Nasdaq, but under the new ticker symbol "SVC" beginning as of the opening of trading on September 25, 2019.