Summary
Public Storage (PSA) filed an 8-K on April 6, 2011, primarily to announce the entry into a material definitive agreement for the sale of preferred stock. Specifically, the company entered into an Underwriting Agreement to sell 13,000,000 depositary shares, each representing 1/1,000 of a 6.5% Cumulative Preferred Share of beneficial interest, Series Q. The underwriters were also granted an option to purchase up to an additional 1,950,000 depositary shares to cover potential over-allotments. This issuance represents a significant capital-raising event for Public Storage. The filing also details that upon the issuance of these preferred shares, certain restrictions will be placed on the company's ability to make distributions or redeem other junior or parity securities if preferred share distributions are not declared. This new series of preferred stock expands the company's capital structure and financial flexibility, while also introducing specific covenants related to its preferred stock obligations.
Key Highlights
- 1Public Storage entered into an Underwriting Agreement on April 5, 2011, to issue and sell 13,000,000 depositary shares representing 6.5% Cumulative Preferred Shares, Series Q.
- 2An option for underwriters to purchase up to 1,950,000 additional depositary shares for over-allotment purposes was granted.
- 3The preferred shares will yield a fixed 6.5% cumulative dividend.
- 4The issuance of these preferred shares imposes certain restrictions on the company's ability to make distributions or redeem junior or parity securities if preferred dividends are not paid.
- 5The company's Board of Trustees is authorized to issue up to 100,000,000 shares of preferred stock, and this Series Q issuance is part of that authorization.
- 6The filing includes exhibits such as the Underwriting Agreement, Articles Supplementary, and an opinion from legal counsel regarding the legality of the issuance.