Summary
Public Storage (PSA) announced the completion of a significant debt offering on September 18, 2017, raising a total of $1 billion. This offering consisted of $500 million in 2.370% Senior Notes due 2022 and $500 million in 3.094% Senior Notes due 2027. These new notes are unsecured and unsubordinated, ranking equally with the company's existing unsecured and unsubordinated debt. The company entered into an Indenture with Wells Fargo Bank, N.A. as trustee, which outlines the terms and covenants associated with these new notes. The Indenture includes provisions that restrict Public Storage's ability to incur additional secured and unsecured indebtedness and to engage in mergers or asset sales, subject to certain exceptions. A key covenant requires the company to maintain total unencumbered assets at least 125% of total unsecured indebtedness, which aims to provide a cushion for bondholders.
Key Highlights
- 1Public Storage successfully issued $1 billion in senior notes.
- 2The offering comprised $500 million in 2.370% Senior Notes due 2022.
- 3The offering also included $500 million in 3.094% Senior Notes due 2027.
- 4The Notes are direct, unsecured, and unsubordinated obligations of the Company.
- 5The Indenture includes covenants limiting future indebtedness and asset disposals.
- 6A key financial covenant requires maintaining total unencumbered assets at least 125% of total unsecured indebtedness.
- 7The proceeds from this offering were used to fund previously announced transactions.