8-KMaterial AgreementsShareholder MattersCorporate Changes+1

Public Storage 8-K Report, Material Agreement (Jan 8, 2013)

Filed January 8, 2013For Securities:PSAPSA-PRPSA-PFPSA-PGPSA-PHPSA-PIPSA-PJPSA-PMPSA-PNPSA-POPSA-PPPSA-PQPSA-PSPSA-PKPSA-PL

Summary

Public Storage (PSA) filed an 8-K on January 7, 2013, to report a material definitive agreement concerning the issuance and sale of new preferred securities. The company entered into an Underwriting Agreement for the sale of 18,000,000 depositary shares, each representing a 1/1000th interest in a 5.20% Cumulative Preferred Share of beneficial interest, Series W. This issuance is a significant capital-raising event for Public Storage, providing potential funds for operations, expansion, or debt management. The filing also notes the underwriters' established relationships with the company, including lending under its revolving credit facility, and outlines certain restrictions on junior or parity securities that may arise from this new preferred share issuance. This transaction allows Public Storage to bolster its capital structure and potentially enhance its financial flexibility. The specific terms of the Series W preferred shares and the depositary shares are detailed in the filed Articles Supplementary and a Master Deposit Agreement. Investors should note that the company's ability to distribute, redeem, or make payments on other classes of securities may be affected if distributions on these new preferred shares are not made. The inclusion of an over-allotment option for underwriters indicates market demand and potential for additional capital raised.

Key Highlights

  • 1Public Storage entered into an Underwriting Agreement to sell 18,000,000 depositary shares representing 5.20% Cumulative Preferred Shares, Series W.
  • 2The company has granted underwriters an option to purchase up to an additional 2,700,000 depositary shares to cover over-allotments.
  • 3The preferred shares carry a fixed dividend rate of 5.20%.
  • 4The issuance of these preferred shares may impose certain restrictions on the company's ability to make distributions or redeem other junior or parity securities.
  • 5Lenders under PSA's revolving credit facility are affiliates of the underwriters involved in this offering.
  • 6The company filed Articles Supplementary designating 20,700,000 preferred shares as Series W.
  • 7This 8-K filing signifies a material capital markets transaction for Public Storage.

Frequently Asked Questions

This 8-K filing reports on the entry into a material definitive agreement for the issuance and sale of new preferred securities by Public Storage. Specifically, it details the sale of 18,000,000 depositary shares representing Series W preferred shares.

The new securities are depositary shares, each representing a 1/1000th interest in a 5.20% Cumulative Preferred Share of beneficial interest, Series W. They carry a fixed dividend rate of 5.20%.

The issuance of these Series W preferred shares may lead to certain restrictions on Public Storage's ability to make distributions, redeem, purchase, or acquire, or make liquidation payments on any other shares of beneficial interest of the company that rank junior to or on parity with the Series W preferred shares, particularly if the company fails to declare distributions on the preferred shares.

Yes, several lenders under Public Storage's revolving credit facility are affiliates of the underwriters for this offering. These lenders will receive their proportionate share of any repayment from the net proceeds of this preferred share offering that is applied to the revolving credit facility.