Summary
Public Storage (PSA) filed an 8-K on January 13, 2016, to report the entry into a material definitive agreement related to the issuance of new preferred shares. Specifically, the company entered into an Underwriting Agreement on January 12, 2016, for the sale of 11,000,000 depositary shares. Each depositary share represents a 1/1,000 interest in a 5.40% Cumulative Preferred Share of Beneficial Interest, Series B. The company also granted underwriters an option to purchase an additional 1,000,000 depositary shares to cover potential over-allotments. This issuance represents a significant capital raise for Public Storage, potentially to fund growth initiatives, acquisitions, or refinance existing debt. The 5.40% cumulative dividend rate provides a fixed income stream for investors in these preferred shares. Investors should note that the terms of these preferred shares introduce certain restrictions on the company's ability to make distributions or take other actions regarding junior or parity securities if preferred dividends are not declared.
Key Highlights
- 1Public Storage entered into an Underwriting Agreement on January 12, 2016, for the sale of preferred shares.
- 2The offering involves 11,000,000 depositary shares, with an option for an additional 1,000,000 shares.
- 3Each depositary share represents a 1/1,000 interest in a 5.40% Cumulative Preferred Share of Beneficial Interest, Series B.
- 4The company filed Articles Supplementary on January 13, 2016, designating 12,000 preferred shares as Series B.
- 5This action signifies a capital raise activity for Public Storage.
- 6The terms of the Series B preferred shares may impose restrictions on other equity issuances if preferred dividends are not paid.