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Public Storage to sell series S perpetual preferreds; talked at 5.9%
By Stephanie N. Rotondo
Portland, Ore., Jan. 4 - Public Storage will issue series S cumulative perpetual preferred shares, according to a prospectus filed with the Securities and Exchange Commission on Wednesday.
According to one market source, price talk had originally been around 5.95%. "But it seems the deal is going well," he noted, as talk was later revised to 5.9%.
Additionally, the source said that the size was announced as $10 million, "but they'll grow that," he said. He estimated the deal would come between $30 million and $50 million.
He expects the deal to price Thursday.
Bank of America Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are the joint book-running managers.
Liquidation preference is $25 per depositary share. There will be an over-allotment option.
The preferreds will be sold as depositary shares each representing a 1/1,000th interest in a cumulative preferred share of beneficial interest, series S, according to the prospectus.
Cumulative dividends will be payable quarterly beginning March 31. The preferreds can be redeemed after January 2017 at par plus accrued dividends.
There is no stated maturity, sinking fund or mandatory redemption.
Proceeds will be used to make investments in self-storage facilities and in entities that own self-storage facilities, to redeem preferred securities and for other general corporate purposes.
"They have a history of just continually rolling over preferreds," the source said, speculating that the company could take out the 6.6% series C cumulative preferreds (NYSE: PSAPC) or some other higher dividend issue.
The Glendale, Calif.-based real estate investment trust intends to list the preferreds on the New York Stock Exchange.
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