Summary
Public Storage (PSA) filed an 8-K on March 5, 2013, to report the entry into a material definitive agreement related to the issuance of new preferred shares. The company entered into an Underwriting Agreement to sell 8,000,000 depositary shares, each representing 1/1,000 of a 5.20% Cumulative Preferred Share of beneficial interest, Series X. An over-allotment option for an additional 1,200,000 depositary shares was also granted to the underwriters. This issuance signifies a capital raise activity by Public Storage, aimed at potentially funding growth or other corporate initiatives. The filing also clarifies certain restrictions on distributions to junior or parity security holders that may arise upon the issuance of these new preferred shares, impacting the rights of existing security holders. Investors should note that the company has formalized its plan to increase its preferred equity by issuing a significant number of new depositary shares. The 5.20% fixed dividend rate on these preferred shares provides a stable income stream from this specific issuance. The filing confirms the terms of this new preferred stock and the associated underwriter syndicate, which includes major financial institutions. The company also disclosed that the terms of these preferred shares impose certain limitations on distributions to other classes of equity holders if preferred dividends are not declared, a detail crucial for understanding the capital structure and dividend policy implications.
Key Highlights
- 1Public Storage entered into an Underwriting Agreement to issue 8,000,000 depositary shares representing 5.20% Cumulative Preferred Shares, Series X.
- 2An over-allotment option for up to 1,200,000 additional depositary shares was granted to the underwriters.
- 3The issuance of these preferred shares may impose restrictions on distributions to junior or parity security holders if preferred dividends are not declared.
- 4The preferred shares carry a fixed dividend rate of 5.20%.
- 5The filing confirms the authorization and designation of 9,200 preferred shares as 5.20% Cumulative Preferred Shares, Series X.
- 6The underwriting syndicate includes prominent financial institutions: Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, UBS Securities LLC, and Wells Fargo Securities, LLC.