S&P rates Public Storage preferreds BBB+

Standard & Poor's said it assigned a BBB+ rating to Public Storage's $250 million series U 5.625% cumulative preferred shares.

The proceeds will be used to redeem its outstanding $172.5 million series N 7.0% cumulative preferred shares. The remaining net proceeds will be used for general corporate purposes, which may include investment in self-storage facilities or redemption of other preferred securities, S&P said.

The stable outlook reflects an expectation for continued generally favorable self-storage supply and demand fundamentals this year, the agency said.

However, S&P said it believes rent growth will moderate and could reverse course quickly if the economy slips back into recession.

The company's strong operating margins and above-trend debt coverage measures provide ample cushion for the current rating and outlook even if an alternative scenario materializes, the agency said.

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