Summary
Public Storage (PSA) has filed an 8-K report detailing the issuance of new preferred equity. Specifically, the company entered into an Underwriting Agreement on March 10, 2014, to sell 9,000,000 depositary shares, each representing 1/1,000 of a 6.375% Cumulative Preferred Share of beneficial interest, Series Y. This offering provides the company with additional capital, which may be used for general corporate purposes, including the repayment of outstanding debt under its term loan. The issuance of these Series Y Preferred Shares introduces certain restrictions on the company's ability to make distributions or payments on more junior or parity securities if dividends on the preferred shares are not declared. This detail is important for existing common shareholders to understand potential impacts on future distributions.
Key Highlights
- 1Public Storage issued 9,000,000 depositary shares representing 6.375% Cumulative Preferred Shares, Series Y.
- 2The offering was conducted through an Underwriting Agreement dated March 10, 2014, with a syndicate of underwriters led by Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, UBS Securities LLC, and Wells Fargo Securities, LLC.
- 3The company granted underwriters an option to purchase up to an additional 1,350,000 depositary shares to cover over-allotments.
- 4The net proceeds from this offering may be used to repay outstanding amounts under the company's term loan.
- 5The terms of the Series Y Preferred Shares establish potential restrictions on distributions to junior or parity securities if the company fails to declare dividends on the preferred shares.
- 6The Board of Trustees is authorized to issue up to 100,000,000 preferred shares, and these Series Y shares are a portion of that authorization.
- 7The filing includes the Underwriting Agreement, Articles Supplementary for the Preferred Shares, and related legal opinions as exhibits.