Business Context and Reporting Period
Company: Public Storage
Filing Type: Form 8-K (Current Report)
Date of Report: June 6, 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. The primary financial details relate to a capital raise:
- Instrument: 5.625% Cumulative Preferred Shares of beneficial interest, Series U.
- Volume: 10,000,000 depositary shares (each representing 1/1,000 of a Preferred Share).
- Over-Allotment Option: Underwriters granted an option to purchase up to 1,500,000 additional depositary shares.
- Underwriters: Merrill Lynch, Pierce, Fenner & Smith Incorporated; Morgan Stanley & Co. LLC; UBS Securities LLC; and Wells Fargo Securities, LLC.
Material Changes
The filing discloses the following material changes effective June 6-7, 2012:
- Capital Structure: Designation of 11,500 preferred shares of beneficial interest as "5.625% Cumulative Preferred Shares, Series U."
- Dividend Restrictions: Upon issuance, the Company's ability to make distributions on junior or parity shares is restricted if distributions on the new Preferred Shares are not declared during any distribution period.
- Corporate Governance: Filing of Articles Supplementary with the Maryland State Department of Assessments and Taxation.
Outlook, Risks, and Contingencies
Management Commentary: The filing confirms the execution of the Underwriting Agreement and the authorization of the Board of Trustees to issue the shares without further shareholder action.
Risks and Conflicts of Interest:
- Underwriters have performed investment banking and advisory services for the Company and received customary fees.
- 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.
- Wells Fargo Bank, National Association serves as the agent for the credit facility.
Investor Verification Checklist
- Verify the final closing date and total proceeds from the sale of the 10,000,000 depositary shares plus any over-allotment exercise.
- Review the Articles Supplementary (Exhibit 3.1) for specific redemption terms and liquidation preferences of the Series U shares.
- Confirm the impact of the new preferred shares on the Company's existing credit facility covenants.
- Check subsequent filings for the actual exercise of the 1,500,000 share over-allotment option.