Business Context and Reporting Period
Company: Public Storage
Filing Type: Form 8-K (Current Report)
Date of Report: January 5, 2012
Event: Entry into a Material Definitive Agreement for the issuance of preferred shares.
Key Financial Metrics
This filing does not report operational financial metrics such as revenue, profit, cash flow, or margins. It details a capital raising transaction:
- Instrument: 5.90% Cumulative Preferred Shares of beneficial interest, Series S.
- Structure: Sale of 16,000,000 depositary shares (each representing 1/1,000 of a Preferred Share).
- Over-Allotment Option: Underwriters granted an option to purchase up to 2,400,000 additional depositary shares.
- Underwriters: Merrill Lynch, Pierce, Fenner & Smith Incorporated; Morgan Stanley & Co. LLC; UBS Securities LLC; Wells Fargo Securities, LLC.
Material Changes
The primary material change is the authorization and filing of Articles Supplementary to designate 18,400 preferred shares of beneficial interest as "5.90% Cumulative Preferred Shares, Series S." This issuance alters the company's capital structure and introduces specific restrictions on distributions to junior or parity securityholders if distributions on the Preferred Shares are not declared.
Guidance, Outlook, and Risks
Management Commentary: The filing confirms the execution of the Underwriting Agreement and the filing of necessary legal documents with the Maryland State Department of Assessments and Taxation on January 6, 2012.
Risks and Contingencies: The issuance of the Preferred Shares subjects the Company's ability to make distributions, redeem, purchase, or acquire other shares ranking junior to or on a parity with the Preferred Shares to certain restrictions in the event of missed distributions on the Preferred Shares.
Related Parties: Affiliates of the underwriters (Merrill Lynch Bank USA, Morgan Stanley Bank, UBS Loan Finance LLC, and Wells Fargo Bank, National Association) are lenders under the Company's credit facility.
Investor Verification Checklist
- Verify the final closing date and total proceeds from the sale of the 16,000,000 depositary shares plus any over-allotment exercise.
- Review the Articles Supplementary (Exhibit 3.1) for specific terms regarding dividend payment dates and redemption rights.
- Confirm the impact of the new preferred shares on the Company's existing credit facility covenants.
- Check subsequent filings for the exercise of the 2,400,000 share over-allotment option.