Summary
Extra Space Storage Inc. (EXR), through its subsidiary Extra Space Storage LP, announced the completion of a $450 million public offering of 2.550% Senior Notes due 2031 on May 11, 2021. These notes are fully and unconditionally guaranteed by the Company and two business trusts (EHBT I and EHBT II). The offering was made under a shelf registration statement and priced at 99.849% of the principal amount, resulting in an effective interest rate slightly higher than the stated coupon due to the discount. The net proceeds are intended for various corporate purposes, including funding potential acquisitions, repaying outstanding credit line balances, and general working capital needs.
Key Highlights
- 1Completion of a $450 million public offering of 2.550% Senior Notes due 2031.
- 2Notes are senior unsecured obligations of Extra Space Storage LP and are guaranteed by the parent company and two business trusts.
- 3The offering was priced at a slight discount (99.849% of principal), implying a yield slightly above the coupon rate.
- 4Net proceeds are earmarked for strategic initiatives like acquisitions, debt repayment, and general corporate purposes.
- 5The indenture includes restrictive covenants limiting additional indebtedness and requiring a pool of unencumbered assets.
- 6The Notes mature on June 1, 2031, with an interest rate of 2.550% per annum, payable semi-annually.
- 7The company has the option to redeem the notes at a premium or at par on or after March 1, 2031.
Frequently Asked Questions
This 8-K filing announces the completion of Extra Space Storage LP's underwritten public offering of $450 million in Senior Notes due 2031 and the associated material definitive agreements.
The company intends to use the net proceeds from the offering to fund potential acquisition opportunities, repay amounts outstanding under its credit lines, and for other general corporate and working capital purposes.
The notes have an aggregate principal amount of $450 million, a coupon rate of 2.550% per annum, mature on June 1, 2031, and are senior unsecured obligations of Extra Space Storage LP, guaranteed by the parent company and two trusts. They were issued at a discount, priced at 99.849% of par.
The 'make-whole' provision allows Extra Space Storage to redeem the notes before maturity, but it must pay a premium equivalent to the present value of remaining interest payments, ensuring noteholders are compensated for early redemption. After March 1, 2031, redemption can occur at par value plus accrued interest.