Service Properties Trust (SVC) announced that it has priced $1.0 billion aggregate principal amount of 8.625% senior secured notes due 2031. The closing is expected to occur on November 16, 2023, subject to the satisfaction of customary closing conditions. The new notes are guaranteed by certain of SVC?s subsidiaries and secured by first-priority liens on the equity interests of subsidiaries that own and lease 70 of its travel center properties to TravelCenters of America Inc. pursuant to two master leases (which SVC refers to as its TA Lease No.

3 and TA Lease No. 4). The aggregate annual minimum rent under the two leases is approximately $91.0 million.

The net proceeds from this transaction, after initial purchaser discounts and offering costs, are expected to be approximately $965.0 million and will be used for the repayment of outstanding debt. SVC also announced the early redemption of its outstanding 4.650% Senior Notes due March 2024 at a redemption price equal to the principal amount of $350.0 million and its outstanding 4.350% Senior Notes due October 2024 at a redemption price equal to the principal amount of $825.0 million, plus, in each case, accrued and unpaid interest to but excluding the dates of redemption. The redemption date for each series will be December 9, 2023.

SVC currently expects to fund these redemptions with the net proceeds from the secured senior notes offering and cash on hand.