SMTA Liquidating Trust (SMTA)

[Enterprising Investor]

Spirit MTA REIT Accelerates Strategic Plan (1/16/19)

Board of Trustees to Explore Strategic Alternatives to Maximize Shareholder Value

Spirit MTA Comments on Bankruptcy of Specialty Retail Shops Holding Corp. et al. (“Shopko Stores”)

DALLAS--(BUSINESS WIRE)--Spirit MTA REIT (NYSE: SMTA) (“SMTA” or the “Company”) announced today that the Board of Trustees has elected to accelerate the Company’s previously announced strategic plan and has engaged advisors to explore strategic alternatives focused on maximizing shareholder value. Strategic alternatives to be considered may include a sale of the Company or the Master Trust 2014, a merger or other potential alternatives.

As of September 30, 2018, SMTA’s portfolio of assets consisted of 784 properties held through the Master Trust 2014, including 5 assets leased to ShopKo Stores. In addition, SMTA had 100 properties held outside the Master Trust 2014, 85 of which were leased to ShopKo Stores and which are encumbered by the previously announced non-recourse mortgage loan. As of January 14, 2019, the Company had approximately $102 million of unrestricted cash and $16 million of restricted cash, providing the Company with sufficient liquidity as it considers strategic alternatives. In addition, the Company maintains a variable funding note in the Master Trust 2014 that is currently undrawn with a maximum capacity of $50 million (subject to collateral value availability) and with current available capacity in excess of $40 million. Ricardo Rodriguez, SMTA’s Chief Executive Officer, Chief Financial Officer and Treasurer stated, “Taking into account our recently announced dividends, we have returned a total of $1.66 per share to our shareholders since our inception less than eight months ago. Through the acceleration of our strategic plan, we will explore all available options to maximize shareholder value. Our Board of Trustees also intends to continue paying dividends equal to 100% of CAD.”

There can be no assurance that the exploration of strategic alternatives will result in any transaction or other alternative. The Company has not set a timetable for completion of the process, and it does not intend to comment further regarding the process unless a specific transaction or other alternative is approved by the Board of Trustees, the process is concluded or it is otherwise determined that further disclosure is appropriate or required by law.

SMTA has continued to monitor its ShopKo Stores related assets, including in connection with the filing by ShopKo Stores and its affiliates of petitions for relief under Chapter 11 of the Bankruptcy Code on January 16, 2019. As previously announced, last year SMTA completed a $165 million non-recourse mortgage loan with a third party lender secured by SMTA’s ShopKo Stores assets held outside of the Master Trust 2014, of which $141.9 million was received by SMTA net of expenses and reserves. SMTA and its advisors are working with the lender under the non-recourse mortgage loan, including potentially to satisfy the loan by relinquishing to the lender the ShopKo Stores securing the loan. As of September 30, 2018, SMTA received $43.2 million in annualized contractual rent from ShopKo Stores, which represented 18.3% of SMTA’s total annualized contractual rent at the time. As a consequence of the filing by ShopKo Stores, SMTA does not expect to receive any additional cash flow going forward from any of the assets leased to ShopKo Stores, nor bear further meaningful expenses related to those assets.

SMTA also holds a secured loan previously made to ShopKo Stores in the amount of approximately $34.4 million. This secured loan has been accelerated due to the filing by ShopKo Stores. While the outcome of the ShopKo Stores Chapter 11 cases are uncertain and there can be no assurances that there will be a recovery in whole or in part with respect to the $34.4 million loan, SMTA intends to exercise and pursue all of its rights and remedies.

For more information, please refer to the risk factors related to ShopKo Stores in the Company’s recent filings with the Securities and Exchange Commission.

Recorded statements from SMTA’s Chief Executive Officer, Chief Financial Officer and Treasurer Ricardo Rodriguez have been posted to the Company’s website. This recording can also be accessed via phone by dialing [phone] (Domestic) / [phone] (International) and using access code 1132853.

About Spirit MTA REIT

Spirit MTA REIT (NYSE: SMTA) is a net-lease REIT headquartered in Dallas, Texas. SMTA owns one of the largest, most diversified and seasoned commercial real estate backed master funding vehicles. Our strategy relies on the disposition of non-core properties, disciplined acquisitions, and proactive portfolio management. SMTA is managed by Spirit Realty Capital, L.P., a wholly-owned subsidiary of Spirit (NYSE: SRC), one of the largest publicly traded triple net-lease REITs.
As of September 30, 2018, our diversified portfolio was comprised of 884 properties, including properties securing mortgage loans made by the Company. Our properties, with an aggregate gross leasable area of approximately 20.0 million square feet, are leased to approximately 205 tenants across 45 states and 23 industries. More information about Spirit MTA REIT can be found on the investor relations page of the Company's website at www.spiritmastertrust.com.

https://www.businesswire.com/news/home/20190116005486/en/Spirit-MTA-REIT-Accelerates-Strategic-Plan