8-K/AMaterial AgreementsShareholder MattersCorporate Changes

Public Storage 8-K/A Report, Material Agreement (Nov 24, 2014)

Filed November 24, 2014For Securities:PSAPSA-PRPSA-PFPSA-PGPSA-PHPSA-PIPSA-PJPSA-PMPSA-PNPSA-POPSA-PPPSA-PQPSA-PSPSA-PKPSA-PL

Summary

Public Storage (PSA) filed an 8-K/A on November 24, 2014, primarily to disclose the details of a material definitive agreement related to the sale of preferred equity. The company entered into an Underwriting Agreement to offer 7,000,000 depositary shares, each representing a 1/1,000 interest in its 5.875% Cumulative Preferred Shares, Series A. This offering also includes an option for underwriters to purchase an additional 1,000,000 depositary shares to cover potential over-allotments, indicating a potential for increased capital raising. The filing also specifies that the terms of these new preferred shares may impose restrictions on the company's ability to make distributions or take other actions regarding junior or parity securities if distributions on the preferred shares are not declared. The issuance of these preferred shares, designated under Articles Supplementary filed on November 21, 2014, represents an expansion of Public Storage's capital structure. Investors should note the 5.875% cumulative dividend rate, which provides a fixed income stream. The involvement of major financial institutions as underwriters and agents for the company's credit facilities highlights established banking relationships. This move signals Public Storage's proactive approach to capital management and potentially funding growth or operational needs through equity issuance.

Key Highlights

  • 1Public Storage entered into an Underwriting Agreement on November 20, 2014, for the sale of 7,000,000 depositary shares.
  • 2Each depositary share represents a 1/1,000 interest in 5.875% Cumulative Preferred Shares, Series A.
  • 3An option to purchase up to 1,000,000 additional depositary shares for over-allotments was granted to underwriters.
  • 4The issuance of these preferred shares imposes restrictions on distributions or actions related to junior or parity securities if preferred share distributions are not made.
  • 5Articles Supplementary were filed on November 21, 2014, designating 8,000,000 preferred shares as Series A.
  • 6Major financial institutions (Merrill Lynch, Morgan Stanley, UBS, Wells Fargo) are involved as underwriters and in the company's credit facilities.
  • 7The 5.875% dividend rate on the preferred shares offers a fixed income component to investors.

Frequently Asked Questions

The primary purpose of this 8-K/A filing is to provide details about Public Storage's entry into an Underwriting Agreement for the sale of new preferred equity securities, specifically 7,000,000 depositary shares representing a 5.875% Cumulative Preferred Share, Series A.

The preferred shares offer a fixed cumulative dividend rate of 5.875%. The initial offering is for 7,000,000 depositary shares, with an option for underwriters to purchase an additional 1,000,000 shares, potentially raising significant capital.

Yes, the terms of the new preferred shares include restrictions. If Public Storage fails to declare distributions on these preferred shares during a distribution period, its ability to make distributions, redeem, purchase, or make liquidation payments on other shares ranking junior to or on parity with the preferred shares will be subject to certain limitations.

The key financial institutions involved as underwriters include Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, UBS Securities LLC, and Wells Fargo Securities, LLC. These institutions, or their affiliates, are also lenders or agents under Public Storage's credit facilities.