Summary
Essex Property Trust, Inc. (ESS) announced on May 6, 2014, its decision to convert all outstanding shares of its 4.875% Series G Cumulative Convertible Preferred Stock into shares of its common stock. This action is being taken in accordance with the terms of the Series G Preferred Stock. The company has also notified holders of the Series G Preferred Stock about this conversion, which will result in the issuance of a specific number of common shares per preferred share, as detailed in the accompanying press release.
Key Highlights
- 1Essex Property Trust (ESS) is converting all outstanding 4.875% Series G Cumulative Convertible Preferred Stock into common stock.
- 2The conversion is in accordance with the terms of the Series G Preferred Stock.
- 3A notice of conversion has been mailed to holders of the Series G Preferred Stock.
- 4The press release attached as an exhibit provides details on the conversion option date, the conversion ratio, the number of shares to be converted, and the impact on distributions.
- 5Essex Portfolio, L.P., the operating partnership, will issue common units to Essex Property Trust equivalent to the number of common shares issued to Series G Preferred Stock holders.
- 6The issuance of partnership units to the parent company is being done in reliance on an exemption from registration under Section 4(2) of the Securities Act of 1933.
- 7This event signifies a change in the capital structure, potentially leading to increased common stock outstanding.
Frequently Asked Questions
The primary event is Essex Property Trust's decision to convert all of its outstanding 4.875% Series G Cumulative Convertible Preferred Stock into shares of its common stock.
The conversion is being executed in accordance with the terms of the Series G Preferred Stock itself. The filing doesn't explicitly state the strategic reason, but conversions are often done when it becomes advantageous for either the issuer or the holders, or to simplify the capital structure.
In connection with the conversion, Essex Portfolio, L.P. will issue a number of its common units to Essex Property Trust that is equivalent to the aggregate number of common shares issued to the Series G Preferred Stock holders. This maintains the equity structure between the parent company and its operating partnership.
The shares of common stock are being issued to the holders of the Series G Preferred Stock upon their conversion. The issuance of common units by the operating partnership to Essex Property Trust is being done under an exemption from registration requirements, relying on the company's status as a publicly traded entity.