Summary
Public Storage (PSA) has filed a Form 8-K on October 5, 2010, reporting a material definitive agreement related to the issuance of new preferred shares. The company entered into an Underwriting Agreement to sell 4,800,000 depositary shares, each representing 1/1,000 of a 6.5% Cumulative Preferred Share of beneficial interest, Series P. An option for an additional 720,000 shares to cover over-allotments was also granted. This issuance introduces a new class of preferred stock, Series P, which carries a 6.5% cumulative dividend. Investors should note that the terms of these new preferred shares will impose certain restrictions on the company's ability to make distributions on, redeem, purchase, or acquire, or make liquidation payments on, any other shares of beneficial interest that rank junior to or on parity with the Series P Preferred Shares, particularly if dividends on the preferred shares are not declared. The company's Board of Trustees has the authority to issue up to 100,000,000 shares of preferred stock, and these Series P shares are part of that authorized capital.
Key Highlights
- 1Public Storage entered into an Underwriting Agreement to issue 4,800,000 depositary shares representing 6.5% Cumulative Preferred Shares, Series P.
- 2An over-allotment option for up to 720,000 additional depositary shares was granted to the underwriters.
- 3The issuance of Series P Preferred Shares will place restrictions on distributions to junior or parity securities if preferred dividends are not declared.
- 4The company's Board of Trustees has the authority to issue up to 100,000,000 preferred shares.
- 5The Series P Preferred Shares are cumulative, meaning any missed dividend payments must be paid out before dividends can be paid to other classes of shares.
- 6This action expands the company's preferred equity capital structure.