Business Context and Reporting Period
Company: Public Storage
Filing Type: Form 8-K (Current Report)
Date of Report: March 4, 2013
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. The financial details are limited to the terms of a capital raise:
- Instrument: 5.20% Cumulative Preferred Shares of beneficial interest, Series X.
- Units Sold: 8,000,000 Depositary Shares (each representing 1/1,000 of a Preferred Share).
- Over-Allotment Option: Underwriters granted an option to purchase up to 1,200,000 additional Depositary Shares.
- Underwriters: Merrill Lynch, Pierce, Fenner & Smith Incorporated; Morgan Stanley & Co. LLC; UBS Securities LLC; Wells Fargo Securities, LLC.
Material Changes
The filing announces a material change in the Company's capital structure through the authorization and sale of new preferred equity. Specifically:
- On March 5, 2013, the Company filed Articles Supplementary designating 9,200 preferred shares as "5.20% Cumulative Preferred Shares, Series X."
- The issuance is subject to the Company's Declaration of Trust, which authorizes up to 100,000,000 preferred shares without further shareholder action.
Guidance, Risks, and Contingencies
Restrictions on Distributions: Upon issuance of the Series X Preferred Shares, the Company's ability to make distributions, redeem, purchase, or acquire any other shares ranking junior to or on a parity with the Preferred Shares will be restricted if the Company fails to declare distributions on the Preferred Shares during any distribution period.
Related Party Transactions: The underwriters and their affiliates (including Bank of America N.A., Morgan Stanley Bank, UBS Loan Finance LLC, and Wells Fargo Bank) have performed investment banking services for the Company and are lenders under the Company's credit facility. Wells Fargo Bank serves as the agent for the credit facility.
Investor Verification Checklist
- Verify the final closing price and total proceeds from the sale of the 8,000,000 Depositary Shares.
- Confirm whether the underwriters exercised the 1,200,000 share over-allotment option.
- Review the Articles Supplementary (Exhibit 3.1) for specific redemption terms and liquidation preferences of the Series X shares.
- Assess the impact of the new preferred dividend obligation on the Company's ability to pay dividends on common shares.