Service Properties Trust announced that 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.

Annual 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.

“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,” says Todd Hargreaves, President and Chief Investment Officer of SVC.