Published on 7/24/2023 in the Prospect News Investment Grade Daily.
New Issue: Public Storage sells $2.2 billion of floaters, fixed-rate senior notes in four parts
By Wendy Van Sickle
Columbus, Ohio, July 24 – Public Storage priced $2.2 billion of senior notes (A2) in four tranches on Monday, according to an FWP filed with the Securities and Exchange Commission.
Public Storage priced $400 million of floating-rate notes due 2025 at par to yield SOFR plus 60 basis points. The coupon will reset quarterly.
The company priced $500 million of 5.125% senior notes due Jan. 15, 2029 at 99.917 to yield 5.143%, or with a spread of 100 bps over Treasuries.
The issuer sold $700 million of 5.1% senior notes due Aug. 1, 2033 at 99.828 to yield 5.122%, or at a spread 125 bps over Treasuries.
Finally, the company priced $500 million of 5.35% senior notes due Aug. 1, 2053 at 99.732 to yield 5.368%, or with a spread of 143 bps over Treasuries.
BofA Securities, Inc., J.P. Morgan Securities LLC, BNP Paribas Securities Corp., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Scotia Capital (USA) Inc. and SMBC Nikko Securities America, Inc. are the joint bookrunners.
The Glendale, Calif.-based storage-focused real estate investment trust will use the proceeds to fund the cash acquisition price of $2.2 billion to acquire Simply Self Storage from Breit, a self-storage company that owns and operates 127 self-storage facilities and manages 25 self-storage facilities for third parties. The transaction is currently expected to close in the third quarter of 2023 subject to customary closing conditions.
Any remaining net proceeds will be used for general corporate purposes, including other acquisitions of self-storage facilities and debt repayment.
| Issuer: | Public Storage
|
| Amount: | $2.2 billion
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| Issue: | Senior notes
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| Bookrunners: | BofA Securities, Inc., J.P. Morgan Securities LLC, BNP Paribas Securities Corp., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Scotia Capital (USA) Inc. and SMBC Nikko Securities America, Inc.
|
| Co-managers: | Citigroup Global Markets Inc., PNC Capital Markets LLC, TD Securities (USA) LLC and UBS Securities LLC
|
| Trustee: | Computershare Trust Co., NA
|
| Counsel to issuer: | Hogan Lovells US LLP
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| Counsel to underwriters: | Skadden, Arps, Slate, Meagher & Flom LLP
|
| Pricing date: | July 24
|
| Settlement date: | July 26
|
| Rating: | Moody’s: A2
|
| Distribution: | SEC registered
|
|
|
| 2025 floaters
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| Amount: | $400 million
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| Maturity: | July 25, 2025
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| Coupon: | SOFR plus 60 bps, resets quarterly
|
| Price: | Par
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| Yield: | SOFR plus 60 bps
|
| Call option: | None
|
| Cusip: | 74460WAJ6
|
|
|
| 2029 notes
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| Amount: | $500 million
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| Maturity: | Jan. 15, 2029
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| Coupon: | 5.125%
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| Price: | 99.917
|
| Yield: | 5.143%
|
| Spread: | Treasuries plus 100 bps
|
| Call: | Make-whole call at Treasuries plus 15 bps until Dec. 15, 2028; thereafter at par
|
| Cusip: | 74460WAF4
|
|
|
| 2033 notes
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| Amount: | $700 million
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| Maturity: | Aug. 1, 2033
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| Coupon: | 5.1%
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| Price: | 99.828
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| Yield: | 5.122%
|
| Spread: | Treasuries plus 125 bps
|
| Call option: | Make-whole call prior to May 1, 2033 at Treasuries plus 20 bps; par call after that
|
| Cusip: | 74460WAG2
|
|
|
| 2053 notes
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| Amount: | $600 million
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| Maturity: | Aug. 1, 2053
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| Coupon: | 5.35%
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| Price: | 99.732
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| Yield: | 5.368%
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| Spread: | Treasuries plus 143 bps
|
| Call option: | Make-whole call prior to Feb. 1, 2053 at Treasuries plus 25 bps; par call after that
|
| Cusip: | 74460WAH0
|
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