OREANDA-NEWS. S&P Global Ratings today assigned its 'BBB-' issue-level rating to Spirit Realty L. P.'s $300 million senior unsecured notes due 2026. The notes are fully and unconditionally guaranteed by parent company Spirit Realty Capital Inc.

Spirit Realty Capital will use the proceeds from this debt issuance to first repay some borrowings under its revolving credit and term loan facilities, with the ultimate use being to pay down mortgage debt that is pre-payable over the next 45 days. We estimate that Spirit will have greater than 50% of its NOI derived from unencumbered properties within the next 12 months, which is a hurdle to keeping the notes from being notched down below the 'BBB-' corporate credit rating on Spirit Realty Capital Inc.

The indenture governing the notes contains covenants typical of U. S. equity REITs including a limitation on total debt (less than 60% of total assets) and secured debt (less than 40% of total assets) as well as a minimum debt service coverage requirement (greater than 1.5x) and maintenance of total unencumbered assets (greater than 1.5x of total unsecured debt).