8-KMaterial AgreementsShareholder MattersCorporate Changes+1

Public Storage 8-K Report, Material Agreement (Sep 30, 2020)

Filed September 30, 2020For 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 September 30, 2020, to announce the entry into an Underwriting Agreement for the sale of 10,000,000 depositary shares, representing a 3.875% Cumulative Preferred Share of Beneficial Interest, Series N. This offering, managed by BofA Securities, Morgan Stanley, UBS Securities, and Wells Fargo Securities, also includes an option for underwriters to purchase up to 1,500,000 additional depositary shares to cover over-allotments. This move signals Public Storage's intention to raise capital through preferred equity issuance. Furthermore, the filing details the terms of these new preferred shares, including that distributions on other junior or parity shares will be restricted if distributions on the Series N preferred shares are not declared. This provides a layer of protection for the new preferred shareholders. The company also formally filed Articles Supplementary to designate these preferred shares, demonstrating the completion of the necessary corporate actions for issuance.

Key Highlights

  • 1Public Storage entered into an Underwriting Agreement to issue 10,000,000 depositary shares representing Series N preferred shares.
  • 2The Series N preferred shares carry a fixed dividend rate of 3.875%.
  • 3An option exists for underwriters to purchase an additional 1,500,000 depositary shares to cover potential over-allotments.
  • 4The issuance of these preferred shares may impose restrictions on distributions or redemptions of other junior or parity securities if preferred dividends are not paid.
  • 5The company formally filed Articles Supplementary to designate the 3.875% Cumulative Preferred Shares, Series N.
  • 6Major financial institutions, including affiliates of the underwriters, are also lenders under Public Storage's existing credit facilities, indicating established banking relationships.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce Public Storage's entry into a material definitive agreement for the sale of 10,000,000 depositary shares, which represent a new series of preferred stock (Series N) with a 3.875% cumulative dividend rate. It also details the terms and conditions of this issuance.

The issuance of Series N preferred shares is a form of capital raise for Public Storage. For existing common shareholders, it means an additional class of securities with a priority claim on dividends and assets in liquidation over common shares. Additionally, the filing states that if distributions on the Series N preferred shares are not declared, then distributions or redemptions on junior or parity shares will be restricted, which could impact common shareholders' ability to receive dividends or distributions.

The new Series N preferred shares will pay a cumulative dividend of 3.875% per annum. The term 'cumulative' means that if the company misses any dividend payments, those missed payments will accrue and must be paid out to preferred shareholders before any dividends can be paid to junior or parity shares.

The underwriters for this offering are BofA Securities, Inc., Morgan Stanley & Co. LLC, UBS Securities LLC, and Wells Fargo Securities, LLC.