Public Storage talks planned cumulative preferreds at 5.625% to 5.75%

By Stephanie N. Rotondo

Phoenix, June 5 - Public Storage will issue series U cumulative perpetual preferred stock, according to a prospectus filed with the Securities and Exchange Commission on Tuesday.

Price talk is 5.625% to 5.75%, a trader said.

The preferreds will be issued as depositary shares representing a 1/1,000th of an interest.

Dividends will be paid quarterly, beginning Sept. 30. The Glendale, Calif.-based real estate investment trust cannot redeem the preferreds before June 2017, except in order to preserve its REIT status.

Public Storage will apply to list the new preferreds on the New York Stock Exchange under the symbol PSAPU.

Bank of America Merrill Lynch, Morgan Stanley & Co. Inc., UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunning managers. J.P. Morgan Securities LLC and RBC Capital Markets are the co-managers.

Proceeds from the sale will be used to redeem $172.5 million of 7% series N cumulative preferred shares. Any remaining funds will be used for general corporate purposes, which may include investments in self-storage facilities and other possible redemptions.

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