Summary
Public Storage (PSA) announced on June 7, 2021, the pricing of a public offering of 4.000% Cumulative Preferred Share of Beneficial Interest, Series P. The company intends to use the net proceeds from this offering for general corporate purposes, with a specific focus on redeeming its 5.125% Cumulative Preferred Shares, Series C. This move aligns with PSA's ongoing strategy to optimize its capital structure by reducing the cost of its existing preferred equity. This offering represents a continuation of Public Storage's successful capital management efforts. Since 2015, the company has strategically redeemed or called for redemption a significant amount of preferred equity, leading to a substantial reduction in its average cost of preferred equity by approximately 120 basis points. Concurrently, PSA has issued a large volume of unsecured debt at a low average interest rate to fuel strategic growth, supplemented by free cash flow.
Key Highlights
- 1Public Storage priced a public offering of 4.000% Cumulative Preferred Share of Beneficial Interest, Series P.
- 2Proceeds will be used for general corporate purposes, including the redemption of 5.125% Cumulative Preferred Shares, Series C.
- 3This offering is part of a strategy to lower the cost of in-place capital.
- 4Since 2015, PSA has redeemed or called $4.6 billion of preferred equity.
- 5The average cost of preferred equity has decreased by approximately 120 basis points to 4.7% since 2015.
- 6PSA has issued $5 billion of unsecured debt at a 1.9% average rate since 2015 to fund growth.
- 7The company utilizes free cash flow to supplement funding for strategic growth.