8-KMaterial AgreementsShareholder MattersCorporate Changes+1

Public Storage 8-K Report, Material Agreement (Mar 1, 2019)

Filed March 1, 2019For Securities:PSAPSA-PRPSA-PFPSA-PGPSA-PHPSA-PIPSA-PJPSA-PMPSA-PNPSA-POPSA-PPPSA-PQPSA-PSPSA-PKPSA-PL

Summary

This 8-K filing by Public Storage (PSA) on March 1, 2019, primarily announces the company's entry into a material definitive agreement for the sale of 11,400,000 depositary shares. Each depositary share represents a 1/1,000th interest in a 5.60% Cumulative Preferred Share of Beneficial Interest, Series H. This issuance aims to raise capital and expand the company's financing structure. The filing also notes that the terms of these new preferred shares will impose certain restrictions on the company's ability to make distributions or take other actions regarding junior or parity securities if distributions on the Series H preferred shares are not declared. Investors should be aware that this issuance of preferred stock is a significant capital-raising event that could impact the company's financial leverage and dividend policies for common shareholders.

Key Highlights

  • 1Public Storage entered into an Underwriting Agreement to sell 11,400,000 depositary shares.
  • 2Each depositary share represents a 1/1,000th interest in a 5.60% Cumulative Preferred Share of Beneficial Interest, Series H.
  • 3The offering is being conducted through underwriters including Merrill Lynch, Morgan Stanley, UBS Securities, and Wells Fargo Securities.
  • 4The company's Board of Trustees is authorized to issue up to 100,000,000 preferred shares, and 11,400 of these have now been designated as Series H.
  • 5Issuance of the Series H preferred shares introduces restrictions on distributions or redemptions of junior or parity securities if preferred distributions are not made.
  • 6The filing details the underwriting agreement, articles supplementary for the preferred shares, and the master deposit agreement.

Frequently Asked Questions

The primary purpose of this filing is to announce Public Storage's entry into a material definitive agreement for the sale of 11,400,000 depositary shares, which represent a new series of preferred stock (Series H).

The new shares are 5.60% Cumulative Preferred Shares of Beneficial Interest, Series H. They are issued in the form of depositary shares, with each share representing a 1/1,000th interest in a preferred share. The cumulative nature means that any missed dividend payments must be made up later.

The issuance of these preferred shares introduces covenants that may restrict Public Storage's ability to make distributions, redeem, purchase, or acquire other securities that rank junior to or on parity with the Series H preferred shares if the preferred dividends are not declared. This could impact the flexibility for common shareholders regarding dividends or buybacks.

Public Storage's Declaration of Trust allows for up to 100,000,000 preferred shares. With this filing, 11,400 preferred shares have been designated as Series H, representing the issuance of 11,400,000 depositary shares.