What is the purpose of this 8-K filing?

This 8-K filing announces Public Storage's (PSA) entry into an Underwriting Agreement to issue and sell 6,000,000 depositary shares, representing a new series of preferred stock (Series O, 3.900% Cumulative Preferred Shares). It also details the terms and potential implications of this issuance on the company's capital structure and other security holders.

What are the key financial terms of the new preferred shares?

The new preferred shares, designated as 3.900% Cumulative Preferred Shares, Series O, carry a fixed dividend rate of 3.900%. These are offered through depositary shares, with each depositary share representing a 1/1000th interest in a preferred share.

How does this issuance affect existing PSA shareholders or other security holders?

The issuance of these preferred shares introduces a new class of capital with a fixed dividend. Importantly, the terms of the preferred shares include a restriction: if PSA fails to declare distributions on these preferred shares, it may limit the company's ability to make distributions or payments on securities that rank junior to or on parity with these preferred shares.

What is the total potential capital raise from this offering?

The initial offering is for 6,000,000 depositary shares. With the underwriters' option to purchase an additional 900,000 shares, the total offering could potentially reach 6,900,000 depositary shares.

PSA 8-K: Material Agreements, Shareholder Matters & More

Summary

Public Storage (PSA) filed an 8-K on November 13, 2020, primarily to announce the entry into an Underwriting Agreement for the sale of 6,000,000 depositary shares representing 3.900% Cumulative Preferred Shares, Series O. The company also granted underwriters an option to purchase up to an additional 900,000 depositary shares. This issuance is a material event that will impact the company's capital structure and may impose certain restrictions on future distributions or redemptions of junior or parity securities if preferred share distributions are not met. The filing details the terms of the preferred shares and the associated depositary shares. Investors should note the specific dividend rate of 3.900% on these preferred shares. The transaction involves several major financial institutions as underwriters, some of which also serve as lenders under PSA's existing revolving credit facility. This preferred stock offering aims to raise capital, and its terms are important for understanding the priority of payments and potential limitations on other equity issuances.

Key Highlights

1Public Storage (PSA) entered into an Underwriting Agreement to sell 6,000,000 depositary shares, each representing a 1/1000th interest in a 3.900% Cumulative Preferred Share of Beneficial Interest, Series O.
2An option for underwriters to purchase up to an additional 900,000 depositary shares to cover over-allotments was granted.
3The issuance of these preferred shares may place restrictions on PSA's ability to make distributions on, redeem, purchase, acquire, or make liquidation payments on any junior or parity securities if preferred share distributions are not declared.
4The 3.900% Cumulative Preferred Shares, Series O, carry a fixed dividend rate, providing a predictable income stream for holders.
5The filing specifies the terms of the preferred shares through Articles Supplementary and the terms of the depositary shares through a Master Deposit Agreement.
6Major financial institutions including BofA Securities, Morgan Stanley, UBS Securities, and Wells Fargo Securities acted as underwriters.

Public Storage 8-K Report, Material Agreement (Nov 13, 2020)

Summary

Key Highlights

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