Published on 4/9/2024 in the Prospect News Investment Grade Daily.
New Issue: Public Storage sells $1 billion of floaters, add-on to notes due 2053
By Wendy Van Sickle
Columbus, Ohio, April 9 – Public Storage Operating Co. priced $1 billion of senior notes (A2) in two tranches on Tuesday, including one tranche of new floating-rate notes and the other a tap offering of its 5.35% notes due 2053, according to an FWP filed with the Securities and Exchange Commission.
Public Storage priced $700 million of floating-rate notes due 2027 at par to yield SOFR plus 70 basis points. The coupon will reset quarterly.
Also, the company priced a $300 million add-on to its 5.35% senior notes due Aug. 1, 2053 at 98.249 to yield 5.47%, or with a spread of 97 bps over Treasuries. The tap offering will join the initial $600 million of notes issued July 26, 2023, under the same indenture, to form a single series.
Citigroup Global Markets Inc, Morgan Stanley & Co. LLC, BNP Paribas Securities Corp., Scotia Capital (USA) Inc., UBS Securities LLC and Wells Fargo Securities, LLC are the joint bookrunners.
The Glendale, Calif.-based storage-focused real estate investment trust will use the proceeds to repay its $700 million floaters due April 23, 2024, with any remaining net proceeds used for general corporate purposes, including other acquisitions of self-storage facilities and debt repayment.
| Issuer: | Public Storage Operating Co.
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| Guarantor: | Public Storage (PSA)
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| Amount: | $1 billion
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| Issue: | Senior notes
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| Bookrunners: | Citigroup Global Markets Inc, Morgan Stanley & Co. LLC, BNP Paribas Securities Corp., Scotia Capital (USA) Inc., UBS Securities LLC and Wells Fargo Securities, LLC
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| Co-manager: | PNC Capital Markets LLC
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| Trustee: | Computershare Trust Co., NA
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| Counsel to issuer: | Hogan Lovells US LLP
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| Counsel to underwriters: | Skadden, Arps, Slate, Meagher & Flom LLP
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| Pricing date: | April 9
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| Settlement date: | April 16
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| Rating: | Moody’s: A2
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| Distribution: | SEC registered
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| 2027 floaters
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| Amount: | $700 million
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| Maturity: | April 16, 2027
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| Coupon: | SOFR plus 70 bps, resets quarterly
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| Price: | Par
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| Yield: | SOFR plus 70 bps
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| Call option: | None
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| Cusip: | 74464AAA9
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| 2053 add-on
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| Amount: | $300 million
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| Maturity: | Aug. 1, 2053
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| Coupon: | 5.35%
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| Price: | 98.249
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| Yield: | 5.47%
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| Spread: | Treasuries plus 97 bps
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| Call option: | Make-whole call prior to Feb. 1, 2053 at Treasuries plus 25 bps; par call after that
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| Total issue size: | $900 million, including $600 million issued on July 26, 2023
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| Cusip: | 74460WAH0
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