Service Properties Trust (Nasdaq: SVC), or SVC, a Maryland real estate investment trust, or REIT, announced today that it has commenced a cash tender offer, or the Offer, to purchase up to $100,000,000 of its outstanding $400,000,000 aggregate principal amount of 4.25% Senior Notes due 2021 (CUSIP No. 44106M AU6), or the Notes.
The following table sets forth some of the terms of the Offer:
Title of Security
4.25% Senior Notes due 2021
1.75% UST due 11/15/2020
- The applicable page on Bloomberg from which the Dealer Managers will quote the bid-side price of the reference U.S. Treasury Security. In the above table, "UST" denotes a U.S. Treasury Security.
The Offer is being made upon, and is subject to, the terms and conditions set forth in the Offer to Purchase, dated June 2, 2020, or the Offer to Purchase, and the related Letter of Transmittal. The Offer will expire at 11:59 p.m., New York City time, on June 29, 2020, unless extended by SVC, or the Expiration Date, or earlier terminated. Tenders of Notes may be withdrawn at any time at or prior to 5:00 p.m., New York City time, on June 15, 2020, which is both the Early Tender Deadline and the Withdrawal Deadline, but may not be withdrawn thereafter except in certain limited circumstances as described in the Offer to Purchase.
The total consideration, or the Total Consideration, to be paid in the Offer for Notes that are validly tendered and not withdrawn at or prior to the Early Tender Deadline and accepted for purchase will be determined in the manner described in the Offer to Purchase by reference to a fixed spread over the yield to maturity of the Reference U.S. Treasury Security specified in the table above and in the Offer to Purchase and will include an early tender premium of $50 per $1,000 principal amount of the Notes accepted for purchase, or the Early Tender Premium. Holders of Notes who validly tender their Notes following the Early Tender Deadline and prior to the Expiration Date will only receive the applicable "Tender Offer Consideration" per $1,000 principal amount of any such Notes tendered by such holders that are accepted for purchase, which is equal to the Total Consideration minus the Early Tender Premium. The Total Consideration will be determined at 10:00 a.m., New York City time, on June 16, 2020 unless extended by SVC, or the Tender Offer Price Determination Date.
Tenders of Notes will be accepted only in principal amounts equal to $2,000 or integral multiples of $1,000 in excess thereof. Holders who tender less than all of their Notes must continue to hold Notes of such series in the minimum authorized denomination of $2,000 principal amount or an integral multiple of $1,000 in excess thereof.
Payments for Notes purchased will include accrued and unpaid interest from and including the most recent interest payment date for the Notes up to, but not including, the applicable settlement date. The settlement date for Notes that are validly tendered prior to the Early Tender Deadline, or the Early Settlement Date, is expected to be June 17, 2020, subject to all conditions to the Offer having been either satisfied or waived by SVC. The settlement date for the Notes that are tendered following the Early Tender Deadline but prior to the Expiration Date is expected to be July 1, 2020, or the Final Settlement Date, subject to all conditions to the Offer having been either satisfied or waived by SVC, assuming Notes having an aggregate principal amount equal to the Tender Cap are not purchased on the Early Settlement Date.
Subject to the Tender Cap, all Notes validly tendered and not validly withdrawn on or before the Early Tender Deadline will be accepted before any Notes validly tendered after the Early Tender Deadline. Even if the Offer is not fully subscribed as of the Early Tender Deadline, subject to the Tender Cap, Notes validly tendered and not validly withdrawn on or before the Early Tender Deadline will be accepted for purchase in priority to Notes tendered after the Early Tender Deadline.
Notes may be subject to proration if the aggregate principal amount validly tendered and not validly withdrawn would cause the Tender Cap to be exceeded. Furthermore, if the Offer is fully subscribed as of the Early Tender Deadline, holders who validly tender Notes following the Early Tender Deadline will not have any of their Notes accepted for payment.
SVC’s obligation to consummate the Offer is subject to the satisfaction or waiver of certain conditions, which are more fully described in the Offer to Purchase, including, among others, SVC’s completion of a new issuance of senior notes, or the New Notes Offering, in a registered offering under the Securities Act of 1933, as amended, in an aggregate principal amount of at least $550 million (which amount may be decreased or increased depending on, among other things, market demand), to be issued by SVC and guaranteed by certain of SVC’s subsidiaries. No assurance can be given that the New Notes Offering will be completed. The New Notes Offering is not conditioned upon the consummation of the Offer. In no event will the information contained in this press release regarding the New Notes Offering constitute an offer to sell or a solicitation of an offer to buy any securities in the New Notes Offering.
BofA Securities, and Wells Fargo Securities are acting as dealer managers for the Offer. The tender agent and information agent for the tender offer is Global Bondholder Services Corporation. Questions regarding the tender offer may be directed to BofA Securities at (980) 387-3907 (collect) or (888) 292-0070 (U.S. toll-free) or Wells Fargo Securities at (704) 410-4759 (collect) or (866) 309-6316 (U.S. toll-free). Holders who would like additional copies of the offer documents may call the information agent, Global Bondholder Services Corporation at (212) 430-3774 (collect, for banks or brokers) or (866) 470-3700 (toll-free, for all others) or by e-mail at firstname.lastname@example.org.
This press release is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell the Notes. The tender offer is being made solely by means of the Offer to Purchase and the related Letter of Transmittal that SVC is distributing to holders of Notes.
About Service Properties Trust
Service Properties Trust is a REIT which owns a diverse portfolio of hotels and net lease service and necessity-based retail properties across the United States and in Puerto Rico and Canada with 148 distinct brands across 23 industries. SVC’s properties are primarily operated under long-term management or lease agreements. SVC is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), or RMR Inc., an alternative asset management company that is headquartered in Newton, Massachusetts.
Warning Concerning Forward-Looking Statements
This press release contains statements that constitute forward-looking statements. Whenever SVC uses words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "will," "may" and negatives or derivatives of these or similar expressions, SVC is making forward-looking statements. These forward-looking statements are based upon SVC’s present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by SVC’s forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond SVC’s control. For example, we expect the Early Settlement Date to be June 17, 2020 and the Final Settlement Date to be July 1, 2020. In fact, our purchase of the Notes is subject to various conditions. If these conditions are not satisfied, the applicable Settlement Dates and the Offer may be delayed or may not be completed.
The information contained in SVC’s filings with the SEC, including under the caption "Risk Factors" in SVC’s periodic reports, or incorporated therein, identifies other important factors that could cause differences from SVC’s forward-looking statements. SVC’s filings with the SEC are available on the SEC’s website at www.sec.gov.
You should not place undue reliance upon forward-looking statements.
Except as required by law, SVC does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
Kristin Brown, Director, Investor Relations