Summary
Public Storage (PSA) filed an 8-K on January 19, 2021, to report on the successful completion of a $500 million offering of 0.875% Senior Notes due 2026. This debt issuance, conducted under an underwriting agreement with BofA Securities, J.P. Morgan Securities, and Wells Fargo Securities, was made effective through a shelf registration statement filed in May 2019. The new notes are unsecured, unsubordinated obligations of the company, ranking equally with existing senior indebtedness. The new notes bear a low interest rate of 0.875% and mature on February 15, 2026, with semi-annual interest payments beginning August 15, 2021. The issuance of these notes is governed by an Indenture, as supplemented by a Fourth Supplemental Indenture. The company has the option to redeem the notes at a make-whole price, with redemption at par (100% of principal plus accrued interest) possible on or after January 15, 2026. Covenants within the Indenture include restrictions on incurring additional secured and unsecured debt and limits on mergers and asset sales, alongside a requirement to maintain unencumbered assets at 125% of unsecured indebtedness.
Key Highlights
- 1Public Storage successfully closed a $500 million offering of 0.875% Senior Notes due 2026.
- 2The offering was completed on January 19, 2021, under an underwriting agreement with major financial institutions.
- 3The Notes are unsecured and unsubordinated, ranking pari passu with existing senior debt.
- 4The coupon rate of 0.875% is notably low, reflecting favorable market conditions or the company's credit strength.
- 5Maturity date for the notes is February 15, 2026.
- 6The Indenture includes covenants restricting further indebtedness and requiring a minimum level of unencumbered assets relative to unsecured debt.