Service Properties Trust Sells 33 Hotels for $300M

TL;DR

SVC selling 33 hotels for $300M to pay down debt. Big move.

AI Summary

Service Properties Trust (SVC) announced on June 3, 2024, that it has entered into a definitive agreement to sell 100% of its interests in 33 hotels to an unaffiliated third party for $300 million. The transaction is expected to close in the third quarter of 2024, subject to customary closing conditions. This sale is part of SVC's ongoing strategy to divest non-core assets and improve its balance sheet.

Why It Matters

This significant divestiture allows Service Properties Trust to reduce its debt and focus on its core portfolio, potentially improving its financial flexibility and long-term shareholder value.

Risk Assessment

Risk Level: medium — The sale is subject to closing conditions, and the proceeds will be used to reduce debt, which could impact future cash flows and dividend capacity.

Key Numbers

• $300M — Sale Proceeds (Amount to be received from the sale of 33 hotels.)
• 33 — Number of Hotels Sold (Specific quantity of hotel properties divested.)

Key Players & Entities

• Service Properties Trust (company) — Registrant
• 33 hotels (real_estate) — Assets being sold
• $300 million (dollar_amount) — Sale price
• June 3, 2024 (date) — Announcement date
• third quarter of 2024 (date) — Expected closing period

FAQ

Key Financial Figures

• $700.0 million — Offerings On June 3, 2024, we issued $700.0 million aggregate principal amount of 8.375% Se
• $500.0 million — Notes due 2029, or the 2029 Notes, and $500.0 million aggregate principal amount of 8.875% Se
• $1.16 billion — We used a portion of the approximately $1.16 billion of the net proceeds from the New Notes
• $350.0 million — and effect the discharge of all of the $350.0 million principal amount outstanding of our 4.5
• $800.0 million — fferings and cash on hand to redeem the $800.0 million principal amount outstanding of our 7.5
• $272.0 million — nder Deadline, holders of approximately $272.0 million aggregate principal amount of the 4.50%
• $991.33 — illion of the 4.50% Notes at a price of $991.33 per $1,000 principal amount of the outs
• $1,000 — e 4.50% Notes at a price of $991.33 per $1,000 principal amount of the outstanding 4.5
• $78.0 million — respect to the remaining approximately $78.0 million 4.50% Notes that were not purchased as
• $800.0 m — price equal to the principal amount of $800.0 million, plus accrued and unpaid interest
• $700 million — derwriters named therein, pertaining to $700 million in aggregate principal amount of the Co
• $500 million — Guaranteed Unsecured Notes due 2029 and $500 million in aggregate principal amount of the Co

Filing Documents

• tm2414242d5_8k.htm (8-K) — 43KB
• tm2414242d5_ex1-1.htm (EX-1.1) — 274KB
• tm2414242d5_ex4-2.htm (EX-4.2) — 239KB
• tm2414242d5_ex4-3.htm (EX-4.3) — 244KB
• tm2414242d5_ex4-4.htm (EX-4.4) — 21KB
• tm2414242d5_ex5-1.htm (EX-5.1) — 29KB
• tm2414242d5_ex5-2.htm (EX-5.2) — 36KB
• tm2414242d5_ex8-1.htm (EX-8.1) — 14KB
• tm2414242d5_ex5-1img001.jpg (GRAPHIC) — 31KB
• tm2414242d5_ex5-1img002.jpg (GRAPHIC) — 2KB
• tm2414242d5_ex5-2img01.jpg (GRAPHIC) — 12KB
• tm2414242d5_ex5-2img02.jpg (GRAPHIC) — 7KB
• tm2414242d5_ex8-1img01.jpg (GRAPHIC) — 5KB
• tm2414242d5_ex8-1img02.jpg (GRAPHIC) — 4KB
• tm2414242d5_ex8-1img03.jpg (GRAPHIC) — 2KB
• tm2414242d5_ex8-1img04.jpg (GRAPHIC) — 3KB
• 0001104659-24-067771.txt ( ) — 1353KB
• hpt-20240603.xsd (EX-101.SCH) — 3KB
• hpt-20240603_lab.xml (EX-101.LAB) — 33KB
• hpt-20240603_pre.xml (EX-101.PRE) — 22KB
• tm2414242d5_8k_htm.xml (XML) — 4KB

01. Other Events

Item 8.01. Other Events. New Notes Offerings On June 3, 2024, we issued $700.0 million aggregate principal amount of 8.375% Senior Guaranteed Unsecured Notes due 2029, or the 2029 Notes, and $500.0 million aggregate principal amount of 8.875% Senior Guaranteed Unsecured Notes due 2032, or the 2032 Notes, and, together with the 2029 Notes, the Notes, in underwritten public offerings, or the New Notes Offerings. The Notes are fully and unconditionally guaranteed, on a joint and several basis and on a senior unsecured basis, by all of our subsidiaries, except for our foreign subsidiaries and certain other excluded subsidiaries. Such other excluded subsidiaries include, but are not limited to, subsidiaries whose equity has been pledged to secure borrowings under our credit agreement, our net lease mortgage notes and our 8.625% Senior Secured Notes due 2031 . The Notes and the guarantees thereof were issued under our Indenture, dated February 3, 2016, or the Base Indenture, between us and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee, or the Indenture Trustee, and supplemental indentures thereto, dated June 3, 2024, among us, the subsidiary guarantors and the Indenture Trustee, or, together, the Supplemental Indentures, and, together with the Base Indenture, the Indenture . The Notes are our senior unsecured obligations and the guarantees are the subsidiary guarantors' senior unsecured obligations. The Notes are subject to certain restrictive financial and operating covenants, including covenants that generally restrict our ability to incur debts, including debts secured by mortgages on our properties, in excess of calculated amounts, and require us to maintain various financial ratios. The 2029 Notes were sold to the public at 99.001% of their principal amount and the 2032 Notes were sold to the public at 98.000% of their principal amount. We used a portion of the approximately $1.16 billion

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (d) Exhibits. 1.1 Underwriting Agreement, dated as of May 17, 2024, among the Company, certain subsidiaries of the Company named therein as guarantors and the underwriters named therein, pertaining to $700 million in aggregate principal amount of the Company's 8.375% Senior Guaranteed Unsecured Notes due 2029 and $500 million in aggregate principal amount of the Company's 8.875% Senior Guaranteed Unsecured Notes due 2032. (Filed herewith.) 4.1 Indenture, dated as of February 3, 2016, between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association). (Incorporated by reference to the Company's Current Report on Form 8-K filed on February 4, 2016.) 4.2 Eleventh Supplemental Indenture, dated as of June 3, 2024, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S. Bank Trust Company, National Association, including the form of 8.375% Senior Guaranteed Unsecured Notes due 2029. (Filed herewith.) 4.3 Twelfth Supplemental Indenture, dated as of June 3, 2024, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S. Bank Trust Company, National Association, including the form of 8.875% Senior Guaranteed Unsecured Notes due 2032. (Filed herewith.) 4.4 Supplemental Indenture, dated as of June 3, 2024, between the Company and U.S. Bank Trust Company, National Association, relating to the Company's 4.50% Senior Notes due 2025. (Filed herewith.) 5.1 Opinion of Sullivan & Worcester LLP. (Filed herewith.) 5.2 Opinion of Venable LLP. (Filed herewith.) 8.1 Opinion of Sullivan & Worcester LLP re: tax matters. (Filed herewith.) 23.1 Consent of Sullivan & Worcester LLP (contained in Exhibits 5.1 and 8.1 ). 23.2 Consent of Venable LLP (contained in Exhibit 5.2). 104 Cover Page Interactive Data File. (Embedded within the Inline XBRL document.)

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SERVICE PROPERTIES TRUST By: /s/ Brian E. Donley Name: Brian E. Donley Title: Chief Financial Officer and Treasurer Dated: June 3, 2024

View Full Filing

View this 8-K filing on SEC EDGAR