Spirit MTA REIT — Investor Presentation (May 2018)
23 slides from Spirit MTA REIT's investor presentation, May 14, 2018
Slide 1: Spirit MTA REIT May 2018
Spirit MTA REIT May 2018 Spirit MASTER TRUST
Slide 2: Disclaimer
Disclaimer This presentation 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 such as “expect,” “plan,” “will,” “estimate,” “project
Slide 3: Overview and Spin Transaction
Overview and Spin Transaction Name Spirit MTA REIT Exchange / Ticker NYSE: SMTA1 894 properties, with a weighted average lease term of 10.4 years and 98% Portfolio occupancy as of March 31, 2018 One Spirit MTA REIT common share for every ten Spirit Realty Capital Distribution Ratio (“SRC”) common sh
Slide 4: Key Investor Highlights
Key Investor Highlights Spirit MTA REIT ShopKo Master Trust •790 Assets1 Academy •$2.0Bn of Debt2 •$172MM of Contractual Rent Other Assets High Quality Portfolio of Diversified Assets Flexible Master Trust Unencumbered Portfolio to Fuel Growth Strong and Independent Board Experienced External Manage
Slide 5: SMTA Portfolio Top Tenants
SMTA Portfolio Top 20 Tenants1 Shopko represents the majority of the Top 5 unencumbered 34.4% portfolio Top 10 44.9% Top 20 Shopko sale 58.1% proceeds expected to be reinvested into assets and distributed to shareholders 1: Pro forma SMTA as of 03/31/2018. Please see Appendix at the back of this pre
Slide 6: SMTA Strategy
SMTA Strategy Sell Shopko and non-core assets Distribute a portion of net sale proceeds to shareholders Redeploy remaining proceeds into MTA assets for levered growth Increase MTA’s cash flows through portfolio recycling and new investments Refinance existing MTA notes to maximize FAD as refinancing
Slide 7: Operational Excellence
Operational Excellence Porter’s Five Forces1 Research driven focus on industries that are positioned for long-term success utilizing Spirit Heat Map Proprietary Spirit Property Ranking Model with annual review process ensures oversight Focused portfolio management allows for ongoing portfolio improv
Slide 8: Capital Allocation Strategy
Capital Allocation Strategy Sell Disposition Proceeds to Shareholders Dividends to Unencumbered Shareholders Assets to MTA Optimize MTA Cash Flows Sell Shopko and $400MM unencumbered assets $350MM Recycle Recycle $129MM $147MM in $300MM in collateral collateral Distribute a portion of net proceeds t
Slide 9: Illustrative Dividend Opportunity
Illustrative Dividend Opportunity1 $100MM Illustrative Special Dividend – 50% of Proceeds $50MM Reinvest into Assets3 Unencumbered Asset Sales2 +$50MM 50% Levered 75% Levered Special Dividend $100MM $200MM -$10MM Assets Purchased Assets Purchased Lost FAD +$7.0MM – NOI +$14.0MM – NOI -$2.5MM – Int.
Slide 10: Illustrative SMTA Sum of the Parts
Illustrative SMTA Sum of the Parts SMTA benefits from ability to raise secured debt at attractive rates Maximize value of Shopko and workout assets to provide capital for future Master Trust A issuances and special dividends to shareholders 1: Shopko contractual rents are adjusted to reflect sales c
Slide 11: Quality Assets Within Master Trust
Quality Assets Within Master Trust Master Trust A Overview Business Sectors (% of Aggregate Collateral Value) Most Recent Issuance Date December 2017 Outstanding Series 2014-1, 2014-2, 2014-3, 2014-4, 2017-1 Ratings (S&P only) A+ / BBB LTV (Dec 2017/Current) 75% / 75% Issuer DSCR (Dec 2017/Current)
Slide 12: Master Trust Top Tenants & Maturity Profile
Master Trust Top Tenants & Maturity Profile Master Trust A has a diversified collateral pool and strong top tenant composition Top 10 Tenants Lease & Loan Maturity Schedule Weighted Average Lease Term: 10.4 years Note: All numbers as of March 2018 servicing reports unless otherwise stated. Please se
Slide 13: Master Trust Funding Facility is an A+ Issuer
Master Trust Funding Facility is an A+ Issuer Net Lease Issuer Market Share (2000—2018 YTD) Long and established track record since 2005 Deal Si ze Issuers Proven issuer of A+ notes, Count ($ MM) CARS 8 $3,915 $510MM in 2014 and SPIRIT 10 $3,502 STORE 8 $1,936 $674MM1 in 2017 CNL 3 $715 Essential Pr
Slide 14: S&P Stress Cash Flow Assumptions for A+ Rating
S&P Stress Cash Flow Assumptions for A+ Rating Note: Preliminary S&P stress assumptions as of October 2017 shown for non-environmental properties and their related leases only. Additional stresses apply for “environmentally sensitive” properties, leases with less than a 1.0x FCCR, vacant properties
Slide 15: Master Trust Benefits
Master Trust Benefits Net lease ABS securitizations provide benefits that do not exist in traditional transactions Transaction Structure Optimize transaction leverage, rating and pricing via efficient and flexible structure Ladder Debt Maturities Reduce the potential for liability sensitivity in a g
Slide 16: Liability Management Opportunity
Liability Management Opportunity Earliest large refinancing opportunity January and July of 2019 —1 Series 2014-1 Class A-1 Notes A No Make repaid in November 2017Jul Series Cl Whole ARD 2014-1—2 (12 2020 A37% months) Cl. 5 $252.7mm outstanding on ARD A No Make Series Mar Whole ARD 2014-2 76% (12 Cl
Slide 17: MTA Amortization Schedule
MTA Amortization Schedule Series 2014-4 Class A1 ARD -$150.0MM due January 2020 10 Series 2014-1 Class A2 ARD -9.1 $215.9MM due July 20201,2 8.8 8.9 9.0 Series 2014-4 Class A2 ARD—8.5 8.7 9 8.4 $92.5MM due January 2030 8.2 8.3 8.2 Series 2014-2 Class A ARD -$220.7MM due March 2021 8 Series 2014-3 Cl
Slide 18: Experienced Independent Trustees
Experienced Independent Trustees 4 of 5 trustees are independent with a range of experience across real estate, private equity, restructuring and public REITs Trustees Profile • CEO and President of Spirit Realty Capital Jackson Hsieh • Former Managing Director and Vice Chairman of Investment Bankin
Slide 19: SRC Platform Capabilities
SRC Platform Capabilities Real estate platform built on experienced management team and specialized disciplines Expanded senior management team Finance and Accounting Strong cross departmental interaction Credit & Asset Acquisitions Management Research Commitment to credit and research Property Clos
Slide 20: Overview of SMTA REIT Structure
Overview of SMTA REIT Structure Alignment of Interest SRC provides property management, special servicing and asset management services to SMTA for total annual fees of approximately $27.7MM Asset Management Agreement: – Term: 3-year initial term – Termination Fee: 1.75x Property Management and Asse
Slide 21: Appendix–Reporting Definitions
Appendix–Reporting Definitions
Slide 22: Reporting Definitions
Reporting Definitions Adjusted Debt represents interest bearing debt Annualized Cash Rents prior to computing the plus adjustments to reflect the Company’s share of (reported in accordance with GAAP) adjusted to exclude disposition Capitalization Rate. In the case of MTA EBITDAre of unconsolidated r
Slide 23: Reporting Definitions
Reporting Definitions Funds from Operations (FFO) and Adjusted Funds from and divestiture costs, other G&A costs associated with Spirit Heat Map is an analysis of potential tenant Operations (AFFO) We calculate FFO in accordance with relocation of the Company’s headquarters, transactions industries