8-KMaterial AgreementsShareholder MattersCorporate Changes+1

Public Storage 8-K Report, Material Agreement (Oct 7, 2016)

Filed October 7, 2016For Securities:PSAPSA-PRPSA-PFPSA-PGPSA-PHPSA-PIPSA-PJPSA-PMPSA-PNPSA-POPSA-PPPSA-PQPSA-PSPSA-PKPSA-PL

Summary

This Form 8-K filing by Public Storage (PSA) on October 7, 2016, announces the company's entry into a material definitive agreement for the sale of 14,000,000 depositary shares. Each depositary share represents a 1/1,000 interest in a 4.90% Cumulative Preferred Share of Beneficial Interest, Series E. The offering is underwritten by a syndicate including Merrill Lynch, Morgan Stanley, UBS, and Wells Fargo. The filing also details modifications to the rights of security holders upon the issuance of these preferred shares. Specifically, it notes that distributions on, or redemptions, purchases, acquisitions, or liquidation payments of other junior or parity securities will be subject to certain restrictions if the company fails to declare distributions on the new Series E preferred shares. The company has officially filed Articles Supplementary to designate these preferred shares, authorized under its Declaration of Trust.

Key Highlights

  • 1Public Storage is issuing 14,000,000 depositary shares representing a new series of preferred stock (Series E).
  • 2The Series E preferred shares carry a fixed dividend rate of 4.90% and are cumulative.
  • 3The offering is being conducted through an underwriting syndicate led by major financial institutions: Merrill Lynch, Morgan Stanley, UBS, and Wells Fargo.
  • 4An option for underwriters to purchase up to 2,100,000 additional depositary shares to cover over-allotments has been granted.
  • 5The issuance of these preferred shares imposes new restrictions on the company's ability to make distributions or payments on other junior or parity securities if preferred dividends are not paid.
  • 6The company has formally filed Articles Supplementary to designate and authorize the issuance of these preferred shares.
  • 7The underwriters and their affiliates have existing relationships with Public Storage, including as lenders under its revolving credit facility and term loan.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce Public Storage's (PSA) entry into an Underwriting Agreement for the sale of 14,000,000 depositary shares, representing a new series of preferred stock (Series E), and to provide details regarding the terms and implications of this issuance.

The Series E Preferred Shares offer a fixed cumulative dividend rate of 4.90%. Each depositary share represents a 1/1,000th interest in one preferred share. The total number of preferred shares being offered indirectly through depositary shares is equivalent to 14,000,000 preferred shares, with an option for an additional 2,100,000.

The issuance of these Series E Preferred Shares may impact shareholders of other junior or parity securities. The filing states that if Public Storage fails to declare distributions on the Series E preferred shares, it will be subject to certain restrictions regarding distributions, redemptions, purchases, or liquidation payments on these other securities.

The underwriters, including Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, UBS Securities LLC, and Wells Fargo Securities, LLC, are facilitating the sale of the depositary shares to the public. They have also been granted an option to purchase additional shares to cover potential over-allotments.