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Section 1: 8-K (8-K)

8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 13, 2018

 

 

SPIRIT REALTY CAPITAL, INC.

SPIRIT REALTY, L.P.

(Exact name of registrant as specified in its charter)

 

 

 

Maryland

(Spirit Realty Capital, Inc.)

  001-36004  

20-1676382

(Spirit Realty Capital, Inc.)

Delaware

(Spirit Realty, L.P.)

  333-216815-01  

20-1127940

(Spirit Realty, L.P.)

(State or other jurisdiction

of incorporation)

  (Commission
File Number)
 

(I.R.S. Employer

Identification No.)

2727 North Harwood Drive, Suite 300

Dallas, Texas 75201

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (972) 476-1900

Not Applicable

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Spirit Realty Capital, Inc.      Emerging growth company  
Spirit Realty, L.P.      Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Spirit Realty Capital, Inc.   
Spirit Realty, L.P.   

 

 

 


ITEM 8.01

OTHER EVENTS.

ATM Program

On November 13, 2018, Spirit Realty Capital, Inc. (the “Company”) filed with the Securities and Exchange Commission (the “SEC”) a prospectus supplement, dated November 13, 2018, to its shelf registration statement on Form S-3 (Registration Nos. 333-220618 and 333-220618-01), which was filed with the SEC and became effective on September 25, 2017, pursuant to Rule 424(b) under the Securities Act of 1933, as amended, relating to the Company’s previously disclosed “at-the-market” offering, pursuant to which the Company may offer and sell shares of the Company’s common stock from time to time to or through Wells Fargo Securities, LLC, RBC Capital Markets, LLC, Scotia Capital (USA) Inc. and SunTrust Robinson Humphrey, Inc., as the Company’s sales agents (the “Agents”) pursuant to an equity distribution agreement, dated as of November 9, 2016, as amended, among the Company, Spirit Realty, L.P. and each of the Agents. An opinion of Ballard Spahr LLP with respect to the validity of shares of the Company’s common stock that may be offered and sold pursuant to this prospectus supplement and the accompanying prospectus is filed herewith as Exhibit 5.1.

This Current Report shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

Reverse Stock Split

On November 13, 2018, the Company announced that its Board of Directors has approved a reverse stock split of the Company’s outstanding shares of common stock at a ratio of one-for-five (the “Reverse Stock Split”). The Reverse Stock Split is scheduled to take effect at approximately 5:01 p.m. Eastern Time on December 12, 2018 (the “Effective Time”). At the Effective Time, every five issued and outstanding shares of common stock of the Company will be converted into one share of common stock of the Company, and as a result the Company’s outstanding shares of common stock will decrease to approximately 85,695,310 from 428,476,552 (as of November 7, 2018). The par value of each share of common stock will be increased from $0.01 per share to $0.05 per share, but the number of the Company’s authorized shares of common stock will remain unchanged. The shares are expected to begin trading on a split-adjusted basis at market open on December 13, 2018. Trading in the common stock will continue on the NYSE under the symbol “SRC” but the security will be assigned a new CUSIP number.

No fractional shares will be issued in connection with the Reverse Stock Split. Instead, each stockholder that otherwise would receive fractional shares will be entitled to receive, in lieu of such fractional shares, cash in an amount determined on the basis of the closing price of the Company’s common stock on the NYSE on December 12, 2018. The Reverse Stock Split will apply to all of the Company’s outstanding shares of common stock as of the Effective Time. Stockholders of record will be receiving information from American Stock Transfer & Trust Company, the Company’s transfer agent, regarding their stock ownership following the Reverse Stock Split and cash in lieu of fractional share payments, if applicable. Stockholders who hold their shares in brokerage accounts or in “street name” are not required to take any action in connection with the Reverse Stock Split.

A copy of the press release issued by the Company is attached as Exhibit 99.1 hereto and is incorporated herein by reference.

Forward-Looking and Cautionary Statements

The attached press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws relating to, among other things, the company’s future performance. These forward-looking statements can be identified by the use of words such as “expect,” “plan,” “will,” “estimate,” “project,” “intend,” “believe,” “guidance,” and other similar expressions that do not relate to historical matters. These forward-looking statements are subject to known and unknown risks and uncertainties that can cause actual results to differ materially from those currently anticipated due to a number of factors, including the risks discussed in the Company’s most recent filings with the Securities and Exchange Commission, including its Annual Report Form 10-K and subsequent quarterly reports on Form 10-Q. All information in the attached press release is as of November 13, 2018, unless otherwise indicated. Undue reliance should not be placed on the


forward-looking statements in the attached press release, which are based on information made available to the company on the date hereof. The Company expressly disclaims any responsibility to update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS.

 

(d)

Exhibits.

 

Exhibit

No.

  

Exhibit Description

5.1    Opinion of Ballard Spahr LLP
23.1    Consent of Ballard Spahr LLP (contained in the opinion filed as Exhibit 5.1 hereto)
99.1    Press Release dated November 13, 2018


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.

Date November 13, 2018

 

Spirit Realty Capital, Inc.

By:

 

/s/ JAY YOUNG

 

Jay Young

 

Executive Vice President, General

Counsel and Secretary

Spirit Realty, L.P.

By: Spirit General OP Holdings, LLC, as general partner of Spirit Realty, L.P.

By:

 

/s/ JAY YOUNG

 

Jay Young

 

Manager

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Section 2: EX-5.1 (EX-5.1)

EX-5.1

Exhibit 5.1

 

LOGO

 

LOGO

November 13, 2018

Spirit Realty Capital, Inc.

2727 North Harwood Street

Suite 300

Dallas, Texas 75201

 

  Re:

Spirit Realty Capital, Inc., a Maryland corporation (the “Company”) – Issuance and sale of shares of common stock, $0.01 par value per share (the “Common Stock”), of the Company having an aggregate gross sales price of up to $500,000,000 (the “Shares”) to be issued and sold from time to time pursuant to the Agreement (as defined herein) and pursuant to a Registration Statement on Form S-3 (Registration Nos. 333-220618 and 333-220618-1) filed with the Securities and Exchange Commission (the “Commission”) on September 25, 2017 (the “Registration Statement”)

Ladies and Gentlemen:

We have acted as Maryland corporate counsel to the Company in connection with the registration of the Shares under the Securities Act of 1933, as amended (the “Act”), by the Company under the Registration Statement. You have requested our opinion with respect to the matters set forth below.

In our capacity as Maryland corporate counsel to the Company and for the purposes of this opinion, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (collectively, the “Documents”):

 

  (i)

the corporate charter of the Company (the “Charter”) represented by Articles of Restatement filed with the State Department of Assessments and Taxation of Maryland (the “Department”) on August 21, 2013, Articles of Amendment filed with the Department on May 13, 2014 and Articles Supplementary filed with the Department on October 2, 2017;

 

  (ii)

the Fifth Amended and Restated Bylaws of the Company, dated as of August 10, 2017 (the “Bylaws”);

 

  (iii)

resolutions (the “Board Resolutions”) adopted by the Board of Directors of the Company (the “Board”) on or as of October 29, 2016 and November 12, 2018 and the form of resolutions (the “Committee Resolutions”, and together with the


BALLARD SPAHR LLP

Spirit Realty Capital, Inc.

November 13, 2018

Page 2

 

  Board Resolutions and any additional resolutions adopted, or other actions taken, subsequent to the date hereof by the Board as contemplated by paragraph (j) below, collectively, the “Directors’ Resolutions”) to be adopted from time to time by the ATM Pricing Committee of the Board of Directors of the Company (the “Pricing Committee”);

 

  (iv)

the Registration Statement filed by the Company with the Commission under the Act, the related base prospectus, dated September 25, 2017, and the related prospectus supplement, dated November 13, 2018;

 

  (v)

a fully executed counterpart of the Equity Distribution Agreement, dated as of November 9, 2016 (the “Original Agreement”), by and among the Company, Spirit Realty, L.P. and Wells Fargo Securities, LLC, RBC Capital Markets, LLC, Scotia Capital (USA) Inc. and SunTrust Robinson Humphrey, Inc., as agents and/or principals (the “Managers”), as amended by Amendment No. 1 to Equity Distribution Agreement, dated as of November 13, 2018 (together with the Original Agreement, collectively, the “Agreement”), by and among the Company, the Operating Partnership and the Managers;

 

  (vi)

a status certificate of the Department, dated as of a recent date, to the effect that the Company is duly incorporated and existing under the laws of the State of Maryland;

 

  (vii)

a second supplemental certificate of one or more officers of the Company, dated as of a recent date (the “Officers’ Certificate”), to the effect that, among other things, the Charter, the Bylaws, the Board Resolutions and the Committee Resolutions are true, correct and complete and have not been rescinded or modified, and that the Charter, the Bylaws and the Board Resolutions are in full force and effect on the date of the Officers’ Certificate, and certifying as to the manner of adoption of the Board Resolutions, the authorization for issuance of the Shares, the form of the Committee Resolutions, and the form, approval, execution and delivery of the Agreement; and

 

  (viii)

such other documents and matters as we have deemed necessary and appropriate to render the opinions set forth in this letter, subject to the limitations, assumptions, and qualifications noted below.

In reaching the opinions set forth below, we have assumed the following:

 

  (a)

each person executing any of the Documents on behalf of any party (other than the Company) is duly authorized to do so;

 

  (b)

each natural person executing any of the Documents is legally competent to do so;


BALLARD SPAHR LLP

Spirit Realty Capital, Inc.

November 13, 2018

Page 3

 

  (c)

any of the Documents submitted to us as originals are authentic; the form and content of any Documents submitted to us as unexecuted drafts do not, and will not, differ in any respect relevant to this opinion from the form and content of such documents as executed and delivered; any of the Documents submitted to us as certified, facsimile or photostatic copies conform to the original document; all signatures on all of the Documents are genuine; all public records reviewed or relied upon by us or on our behalf are true and complete; there has been no modification of, or amendment to, any of the Documents, and there has been no waiver of any provision of any of the Documents by action or omission of the parties or otherwise;

 

  (d)

the Officers’ Certificate and all other certificates submitted to us are true and correct both when made and as of the date hereof;

 

  (e)

neither the issuance and sale of the Shares pursuant to the Agreement, nor the ownership of the Shares by purchasers thereof, will violate any of the ownership or transfer restrictions or limitations contained in the Charter;

 

  (f)

prior to issuance and sale of any of the Shares, the Committee Resolutions setting forth, with respect to such Shares, the maximum number of Shares to be issued and sold, the minimum gross sales price per Share and the minimum price to be received by the Company per Share (net of any discounts provided or commissions paid by the Company in connection with the offering of such Shares) will have been duly adopted at a duly convened meeting of the members of the Pricing Committee or by unanimous consent of the members of the Pricing Committee given in writing or by electronic transmission;

 

  (g)

the aggregate gross sales price of all of the Shares issued and sold pursuant to the Agreement will not exceed $500,000,000, and the aggregate number of Shares issued and sold pursuant to the Agreement will not exceed the maximum aggregate number authorized for issuance and sale in the Directors’ Resolutions;

 

  (h)

the consideration per share to be received by the Company for each Share issued and sold pursuant to the Agreement will be determined in accordance with, and will not be less than the minimum consideration per share set forth in, the Directors’ Resolutions;

 

  (i)

upon each issuance of any of the Shares subsequent to the date hereof, the total number of shares of Common Stock of the Company issued and outstanding, after giving effect to such issuance of such Shares, will not exceed the total number of shares of Common Stock that the Company is authorized to issue under the Charter;

 

  (j)

to the extent which the aggregate gross sales price of Shares issued and sold pursuant to the Agreement exceeds $50,000,000 (any Shares so issued and sold in excess of such price, the “Additional Shares”), the Board will have taken valid


BALLARD SPAHR LLP

Spirit Realty Capital, Inc.

November 13, 2018

Page 4

 

  action in accordance with applicable law prior to the issuance and sale of any such Additional Shares to delegate to the Pricing Committee, upon the same terms set forth in the Board Resolutions, all powers and authority of the Board to authorize the issuance and sale of such Additional Shares and the terms of such issuance and sale, and the Pricing Committee will have taken valid action in accordance with such delegation to adopt Committee Resolutions duly authorizing the issuance and sale of such Additional Shares; and

 

  (k)

from November 9, 2016 through the date hereof, no shares of Common Stock of the Company have been issued and sold pursuant to the Agreement.

Based on our review of the foregoing and subject to the assumptions and qualifications set forth herein, it is our opinion that, as of the date of this letter:

 

  (1)

The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland.

 

  (2)

The Shares have been generally authorized for issuance by the Company pursuant to the Agreement, and when Shares are issued and delivered pursuant to due authorization by the Pricing Committee subsequent to the date hereof, in exchange for payment of the consideration therefor, as provided in, and in accordance with the terms of, the Agreement and the Directors’ Resolutions, such Shares will be duly authorized, validly issued, fully paid and nonassessable.

The foregoing opinion is limited to the laws of the State of Maryland, and we do not express any opinion herein concerning any other law. We express no opinion as to the applicability or effect of any federal or state securities laws, including the securities laws of the State of Maryland, or as to federal or state laws regarding fraudulent transfers. To the extent that any matter as to which our opinion is expressed herein would be governed by the laws of any jurisdiction other than the State of Maryland, we do not express any opinion on such matter.

This opinion letter is issued as of the date hereof and is necessarily limited to laws now in effect and facts and circumstances presently existing and brought to our attention. We assume no obligation to supplement this opinion letter if any applicable laws change after the date hereof, or if we become aware of any facts or circumstances that now exist or that occur or arise in the future and may change the opinions expressed herein after the date hereof.

We consent to the incorporation by reference of this opinion in the Registration Statement and further consent to the filing of this opinion as an exhibit to the applications to securities commissioners for the various states of the United States for registration of the Shares. We also consent to the identification of our firm as Maryland counsel to the Company in the section of the Registration Statement entitled “Legal Matters.” In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Act.

Very truly yours,

/s/ Ballard Spahr LLP

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Section 3: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

LOGO   Press Release

Spirit Realty Capital, Inc. Announces One for Five Reverse Stock Split

DALLAS, Texas, November 13, 2018 — Spirit Realty Capital, Inc. announced today that its Board of Directors approved a 1-for-5 reverse stock split of its outstanding shares of common stock. The reverse stock split is scheduled to take effect at approximately 5:01 p.m. Eastern Time on December 12, 2018 (the “Effective Time”). At the Effective Time, every five (5) issued and outstanding shares of common stock of the Company will be converted into one (1) share of common stock of the Company. The par value of each share of common stock will be increased from $0.01 to $0.05 per share, but the number of the Company’s authorized shares of common stock will remain unchanged. The shares are expected to begin trading on a split-adjusted basis at market open on December 13, 2018. Trading in the common stock will continue on the NYSE under the symbol “SRC” but the security will be assigned a new CUSIP number.

No fractional shares will be issued in connection with the reverse stock split. Instead, each stockholder that otherwise would receive fractional shares will be entitled to receive, in lieu of such fractional shares, cash in an amount determined on the basis of the closing price of the Company’s common stock on the NYSE on December 12, 2018. The reverse stock split will apply to all of the Company’s outstanding shares of common stock as of the Effective Time. Stockholders of record will be receiving information from American Stock Transfer & Trust Company, the Company’s transfer agent, regarding their stock ownership following the reverse stock split and cash in lieu of fractional share payments, if applicable. Stockholders who hold their shares in brokerage accounts or “street name” are not required to take any action in connection with the reverse stock split.

About Spirit Realty Capital

Spirit Realty Capital, Inc. (NYSE: SRC) is a premier net-lease REIT that primarily invests in high-quality, operationally essential real estate, subject to long-term net leases. Over the past decade, Spirit has become an industry leader and owner of income-producing, strategically located retail, industrial, office and data center properties.

As of September 30, 2018, our diversified portfolio was comprised of 1,523 properties, including properties securing mortgage loans made by the Company. Our properties, with an aggregate gross leasable area of approximately 28.7 million square feet, are leased to approximately 252 tenants across 49 states and 32 industries. More information about Spirit Realty Capital can be found on the investor relations page of the Company’s website at www.spiritrealty.com.


Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements can be identified by the use of words and phrases such as “expect,” “plan,” “will,” “intend,” “believe,” “guidance,” “approximately,” “anticipate,” “may,” “should” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate to historical matters but are meant to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions of management. These forward-looking statements are subject to known and unknown risks and uncertainties that you should not rely on as predictions of future events. Forward-looking statements depend on assumptions, data and/or methods which may be incorrect or imprecise and Spirit may not be able to realize them. Spirit does not guarantee that reverse stock split will happen as described (or that it will happen at all) or the effects thereof. These statements are based on certain assumptions made by the Company based on management’s experience and perception of historical trends, current economic and market conditions, anticipated future developments and other factors believed to be appropriate. Additionally, the following risks and uncertainties, among others, could cause actual and future events or results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to: industry and economic conditions; volatility and uncertainty in the financial markets, including potential fluctuations in the Consumer Price Index; Spirit’s continued ability to implement its business strategy and source new investments; risks associated with using debt to fund Spirit’s business activities (including refinancing and interest rate risks, changes in interest rates and/or credit spreads, changes in the price of Spirit’s common stock, and conditions of the equity and debt capital markets, and ability to access debt and equity capital markets generally); Spirit’s ability to pay down, refinance, restructure and/or extend its indebtedness as it becomes due; Spirit’s ability to identify, underwrite, finance, consummate, integrate and manage diversifying acquisitions or investments; unknown liabilities acquired in connection with acquired properties or interests in real-estate related entities; general risks affecting the real estate industry and local real estate markets (including, without limitation, the market value of Spirit’s properties, the inability to enter into or renew leases at favorable rates, portfolio occupancy varying from Spirit’s expectations, dependence on tenants’ financial condition and operating performance, competition from other developers, owners and operators of real estate, tenant defaults, potential liability relating to environmental matters, potential illiquidity of real estate investments, condemnations, and potential damage from natural disasters); the financial performance of Spirit’s tenants and the demand for retail and restaurant space, particularly with respect to challenges being experienced by general merchandise retailers; risks associated with Spirit’s failure or unwillingness to maintain its status as a REIT under the Internal Revenue Code of 1986, as amended; Spirit’s ability to diversify its tenant base; the impact of any financial, accounting, legal or regulatory issues or litigation that may affect Spirit or its major tenants; Spirit’s ability to manage its expanded operations, including Spirit Realty L.P.’s external management of SMTA; uncertainties related to the impact of the spin-off by Spirit of the assets that collateralize Master Trust 2014, properties leased to Shopko, and certain other assets into Spirit MTA REIT on May 31, 2018 (“spin-off”) on Spirit’s business; and other additional risks discussed in Spirit’s most recent filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. All forward-looking statements are based on information that was available, and speak only, as of the date on which they were made. Spirit expressly disclaims any responsibility to update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Investor Contact:

(972) 476-1403

InvestorRelations@spiritrealty.com

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