Summary
This 8-K filing by Public Storage (PSA) on May 2, 2011, announces the company's entry into an Underwriting Agreement for the sale of 1,200,000 depositary shares. Each depositary share represents a 1/1,000 interest in a 6.5% Cumulative Preferred Share of beneficial interest, Series Q. This move signifies Public Storage's initiative to raise capital through preferred equity, which can be a strategic financial maneuver to fund operations, acquisitions, or debt reduction without diluting common shareholder ownership. The filing also details amendments to the company's Articles Supplementary, establishing the terms of these Series Q Preferred Shares. A key point for investors is the modification to the rights of other junior or parity securityholders, which may face restrictions on distributions or redemptions if distributions on the Preferred Shares are not declared. This highlights the preferential nature of the newly issued preferred stock.
Key Highlights
- 1Public Storage entered into an Underwriting Agreement to sell 1,200,000 depositary shares.
- 2Each depositary share represents 1/1,000 of a 6.5% Cumulative Preferred Share, Series Q.
- 3The issuance of these preferred shares aims to raise capital for the company.
- 4Articles Supplementary were filed to designate an additional 1,200 shares of Series Q Preferred Shares.
- 5The terms of the Preferred Shares include potential restrictions on distributions to junior or parity securityholders if preferred dividends are not paid.
- 6Merrill Lynch, Pierce, Fenner & Smith Incorporated is acting as the underwriter.
- 7Affiliates of the underwriter are already lenders under the company's credit facility.