Summary
On April 19, 2019, Public Storage (PSA) announced the execution of a Second Amended and Restated Credit Agreement, establishing a new five-year, $500 million unsecured revolving credit facility that matures on April 19, 2024. This facility replaces the company's prior credit agreement from 2012 and provides significant financial flexibility. It includes an accordion feature allowing for an additional $300 million in borrowings under certain conditions, offering substantial capacity for future growth, capital expenditures, or other corporate needs. The new credit facility is unsecured, and importantly, no subsidiaries are required to guarantee the obligations. The terms include variable interest rates based on competitive bids or LIBOR/base rate plus an applicable margin, which is tied to the company's leverage. The agreement also outlines customary financial covenants, such as leverage and interest coverage ratios, and standard representations and covenants, including limitations on asset sales and changes of control.
Key Highlights
- 1Public Storage secured a new five-year, $500 million unsecured revolving credit facility maturing April 19, 2024.
- 2The new facility replaces the company's 2012 credit agreement.
- 3There is an option to increase the facility by an additional $300 million through additional commitments or term loans.
- 4No subsidiaries are required to guarantee the obligations under the new credit agreement.
- 5Interest rates are variable, based on competitive bid, LIBOR, or base rate plus an applicable margin linked to leverage ratios.
- 6The agreement includes standard financial covenants, such as maximum leverage ratios and minimum interest coverage.
- 7Borrowings can be used for various purposes including development, capital expenditures, debt repayment, and general corporate needs.