8-KMaterial AgreementsShareholder MattersCorporate Changes+1

Public Storage 8-K Report, Material Agreement (Dec 12, 2019)

Filed December 12, 2019For Securities:PSAPSA-PRPSA-PFPSA-PGPSA-PHPSA-PIPSA-PJPSA-PMPSA-PNPSA-POPSA-PPPSA-PQPSA-PSPSA-PKPSA-PL

Summary

Public Storage (PSA) filed an 8-K on December 11, 2019, to announce the issuance of 8,000,000 depositary shares, each representing 1/1,000 of a 4.75% Cumulative Preferred Share of Beneficial Interest, Series K. This offering, conducted through an Underwriting Agreement with several major financial institutions, aimed to raise capital. The company also granted the underwriters an option to purchase an additional 1,200,000 depositary shares to cover potential over-allotments. This issuance introduces a new series of preferred stock into PSA's capital structure. The filing also notes potential restrictions on distributions or redemptions of junior or parity securities if distributions on the new Series K preferred shares are not made. Investors should note that the terms of these new preferred shares are detailed in the filed Articles Supplementary. The company's Board of Trustees has the authority to issue up to 100,000,000 preferred shares, and this issuance utilizes a portion of that authorization. The inclusion of customary provisions for over-allotments and the involvement of prominent underwriters suggest a standard capital-raising transaction. The associated documentation includes the underwriting agreement, articles supplementary, and legal opinions.

Key Highlights

  • 1Public Storage entered into an Underwriting Agreement to sell 8,000,000 depositary shares, representing 4.75% Cumulative Preferred Shares, Series K.
  • 2An option for underwriters to purchase up to 1,200,000 additional depositary shares for over-allotment purposes was granted.
  • 3The issuance introduces a new series of preferred stock (Series K) with a fixed dividend rate of 4.75% to the company's capital structure.
  • 4The company's Board of Trustees is authorized to issue up to 100,000,000 preferred shares of beneficial interest, and this issuance accounts for a portion of that authorization.
  • 5Restrictions on distributions or redemptions of junior or parity securities may apply if distributions on the Series K preferred shares are not declared.
  • 6Key underwriters include BofA Securities, Morgan Stanley, UBS Securities, and Wells Fargo Securities, all of which have existing banking relationships with Public Storage.
  • 7The filing includes the underwriting agreement, articles supplementary for the preferred shares, and a legal opinion on the issuance.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the entry into a material definitive agreement concerning the sale of 8,000,000 depositary shares, representing a new series of preferred stock (4.75% Cumulative Preferred Shares, Series K). This indicates a capital-raising event for the company.

The filing announces the issuance of 8,000,000 depositary shares, each representing 1/1,000 of a 4.75% Cumulative Preferred Share of Beneficial Interest, Series K. The preferred shares have a fixed dividend rate of 4.75%.

Yes, the filing notes that upon issuance, the ability of the company to make distributions, redeem, purchase, acquire, or make liquidation payments on other shares ranking junior to or on parity with the Series K preferred shares may be subject to restrictions, particularly if distributions on the Series K preferred shares are not declared.

The underwriters include BofA Securities, Inc., Morgan Stanley & Co. LLC, UBS Securities LLC, and Wells Fargo Securities, LLC. The filing explicitly states that these institutions, or their affiliates, are lenders under Public Storage's existing revolving credit facility and that Wells Fargo Bank, National Association is the administrative agent for that facility and trustee for its senior notes, indicating existing material relationships.