Business
Service Properties Trust Completes Transaction with BP in Connection with BP’s Acquisition of TravelCenters of America Inc.
SVC Received $379.3 Million in Cash Minimum Annual Cash Rents for 176 Travel Centers Set at $254 Million with 2% Annual Increases Amended Leases Guaranteed
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[{"type":"text","content":"\nSVC Received $379.3 Million in Cash\n\n\nMinimum Annual Cash Rents for 176 Travel Centers Set at $254 Million with 2% Annual Increases\n\n\nAmended Leases Guaranteed by BP Corporation North America Inc. (A3 / A- Ratings)\n\n\n NEWTON, Mass.--(BUSINESS WIRE)--\nService Properties Trust (Nasdaq: SVC) announced today that BP p.l.c. (NYSE: BP) completed its acquisition of TravelCenters of America Inc. on May 15, 2023, and the previously announced amended lease terms between SVC and BP are now in effect. SVC received $379.3 million in cash as part of the transaction, including $188.0 million in prepaid rent from BP, $101.9 million in merger consideration for the 7.8% of the outstanding TA shares owned by SVC, and $89.4 million for certain tradenames and trademarks associated with TA’s business previously owned by SVC.\n\n\nAnnual minimum cash rents under the amended leases are $254.0 million, with annual 2% increases throughout the initial 10-year term and the five 10-year extension options. BP will receive monthly rent credits totaling $25.0 million per year over the 10-year initial term of the leases for the rent BP has prepaid. BP is now SVC’s largest tenant, leasing 30% of SVC’s gross assets based on SVC’s assets as of March 31, 2023, and the guarantor of the leases, BP Corporation North America Inc., is rated A3 by Moody’s and A- by S&P.\n\n\nTodd Hargreaves, President and Chief Investment Officer of SVC, made the following statement regarding today’s announcement:\n\n\n“We believe that the closing of the transaction will benefit SVC shareholders both from the $379.3 million in funds received and by the significantly increased credit quality of our largest tenant, as the amended leases are now guaranteed by an A3/A- rated subsidiary of BP p.l.c.”\n\n\nAbout Service Properties Trust:\n\n\nService Properties Trust (Nasdaq: SVC) is a real estate investment trust, or REIT, with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of March 31, 2023, SVC owned 220 hotels with over 37,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of March 31, 2023, SVC also owned 765 retail service-focused net lease properties totaling over 13.3 million square feet throughout United States. SVC is manag...
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