8-KMaterial AgreementsFinancial EventsExhibits & Filings

Extra Space Storage Inc. 8-K Report, Material Agreement (Mar 28, 2023)

Filed March 28, 2023For Securities:EXR

Summary

Extra Space Storage Inc. (EXR) has announced the completion of a $500 million public offering of 5.700% Senior Notes due 2028 by its subsidiary, Extra Space Storage LP. These notes are unconditionally guaranteed by EXR and two of its business trusts, EHBT I and EHBT II. The offering was priced at 99.823% of the principal amount, indicating a slight premium to par value. This issuance represents a material definitive agreement and the creation of a direct financial obligation for the company's operating subsidiary. The primary purpose of this filing is to inform investors about this significant debt financing. The proceeds from this offering are likely intended for general corporate purposes, which could include funding operations, acquisitions, or refinancing existing debt. The inclusion of guarantees from the parent company and its trusts enhances the credit profile of the debt. Investors should note the interest rate of 5.700%, the maturity date of April 1, 2028, and the restrictive covenants outlined in the indenture, which may impact future financial flexibility.

Key Highlights

  • 1Completed a $500 million public offering of 5.700% Senior Notes due 2028.
  • 2The notes are issued by Extra Space Storage LP, a subsidiary, and guaranteed by Extra Space Storage Inc. (EXR) and two business trusts (EHBT I and EHBT II).
  • 3The offering price was 99.823% of the principal amount, implying a slight discount to par.
  • 4The notes are senior unsecured obligations of the Issuer, ranking equally with other senior unsecured debt.
  • 5Effectively subordinated to mortgage and other secured indebtedness, as well as subsidiary indebtedness.
  • 6The indenture includes restrictive covenants limiting additional indebtedness and requiring maintenance of unencumbered assets.
  • 7The notes bear interest at 5.700% per annum, payable semi-annually, with a maturity date of April 1, 2028.

Frequently Asked Questions

This 8-K filing primarily serves to announce the completion of a $500 million public offering of Senior Notes due 2028 by Extra Space Storage LP, a subsidiary of Extra Space Storage Inc., and to provide details regarding the material definitive agreement and the creation of this new financial obligation.

The notes are issued by Extra Space Storage LP. While they are the senior unsecured obligations of the Issuer, they are fully and unconditionally guaranteed by Extra Space Storage Inc. (EXR) itself, along with two of its business trusts, ESS Holdings Business Trust I and ESS Holdings Business Trust II.

The notes have an aggregate principal amount of $500 million, bear interest at a rate of 5.700% per annum, and mature on April 1, 2028. Interest payments are scheduled for April 1 and October 1, starting October 1, 2023. The offering price was 99.823% of the principal amount.

The notes are senior unsecured obligations of the Issuer. However, they are effectively subordinated to any mortgage indebtedness and other secured indebtedness of the Issuer, as well as any existing and future indebtedness of the Issuer's subsidiaries. This means that in the event of bankruptcy or liquidation, holders of secured debt and subsidiary debt would be paid before holders of these senior unsecured notes.