SCOTTSDALE, AZ—Net lease REIT Spirit Realty Capital said Monday it had closed a $510-million sale of mortgage notes through a private offering from indirectly owned subsidiaries, via SRC's Spirit Master Funding securitization program. The notes were issued as two classes, both rated A+ by Standard & Poor's, and have a blended coupon rate of 4.4230% with a weighted average life of 9.4 years.

SRC subsidiaries Spirit Master Funding LLC, Spirit Master Funding II LLC, Spirit Master Funding III LLC, Spirit Master Funding VI LLC and Spirit Master Funding VIII LLC are the issuers of the notes, which are payable solely from their assets. The REIT plans to use proceeds from the offering to repay borrowings under its revolving line of credit, to fund fourth-quarter acquisitions and for general corporate purposes.

“We are pleased with the pricing and execution of this investment-grade issuance,” says chairman and CEO Thomas H. Nolan Jr. “Our Master Funding program continues to provide us with an efficient platform to lock in attractively priced, fixed-rate capital to match fund our acquisitions of operationally essential real estate net leased to quality, middle market companies.”

The Class A-1 notes have an initial principal balance of $150 million, a stated interest rate of 3.5014% and an anticipated repayment date of January 2020. The Class A-2 notes have an initial principal balance of $360 million, a stated interest rate of 4.6291%, scheduled amortization beginning 36 months after issuance with an anticipated repayment date in January 2030 and a weighted average life of 11.1 years. Morgan Stanley & Co. LLC and Deutsche Bank Securities Inc. served as joint-book running managers for the issuance.

Last month, SRC reported year-over-year increases in funds from operations, net income and revenues in its third-quarter results. Q3 also saw the REIT acquiring 51 properties with a gross investment of $206.2 million in 19 separate transactions, with an initial cash yield of 7.48%. While narrowing its adjusted FFO guidance for 2014 to between 81 and 83 cents per share, compared to the previous range of 80 to 83 cents, SRC also looked ahead to 2015 with an AFFO guidance of 84 to 86 cents per share.