Extra Space Announces Pricing of $400 Million of 5.350% Senior Notes due 2035

Rhea-AI Summary

Extra Space Storage Inc. (NYSE: EXR) has announced that its operating partnership, Extra Space Storage LP, has priced a public offering of $400 million aggregate principal amount of 5.350% senior notes due 2035. The notes were priced at 99.973% of the principal amount and will mature on January 15, 2035. The offering is expected to close on or about August 12, 2024, subject to customary closing conditions.

The company intends to use the net proceeds to repay amounts outstanding from its lines of credit and for other general corporate and working capital purposes, including potential acquisition opportunities. The notes will be fully and unconditionally guaranteed by Extra Space and certain of its subsidiaries.

Several financial institutions, including BofA Securities, PNC Capital Markets , and Truist Securities, are acting as joint book-running managers for the offering.

Positive

• Successful pricing of $400 million senior notes offering
• Potential for strategic acquisitions with proceeds
• Repayment of outstanding credit lines, potentially improving debt structure

Negative

• Increase in long-term debt obligations
• Additional interest expenses from the 5.350% coupon rate

Insights

Financial Analyst

Extra Space Storage's $400 million senior notes offering at 5.350% is a strategic move to optimize their capital structure. The 10-year maturity indicates confidence in long-term market stability. Pricing at 99.973% of face value suggests strong investor demand, reflecting positively on the company's creditworthiness. The intended use of proceeds for debt repayment and potential acquisitions signals a balanced approach to growth and financial management. This offering could enhance Extra Space's financial flexibility, potentially supporting expansion in the competitive self-storage market.

Market Research Analyst

This bond issuance by Extra Space Storage reflects broader trends in the REIT sector. With interest rates stabilizing, companies are locking in longer-term financing. The 5.350% coupon is competitive in the current market, potentially attracting yield-seeking investors. The company's status as an S&P 500 member and its strong underwriter lineup (including major banks) underscore its market position. The focus on acquisition opportunities suggests Extra Space sees growth potential in the self-storage industry, possibly capitalizing on post-pandemic shifts in urban living and business storage needs.

SALT LAKE CITY, Aug. 7, 2024 /PRNewswire/ -- Extra Space Storage Inc. ("Extra Space") (NYSE: EXR), a leading owner and operator of self-storage facilities in the United States and a member of the S&P 500, today announced that its operating partnership, Extra Space Storage LP (the "operating partnership"), has priced a public offering of $400 million aggregate principal amount of 5.350% senior notes due 2035 (the "Notes"). The Notes were priced at 99.973% of the principal amount and will mature on January 15, 2035. BofA Securities, PNC Capital Markets LLC, Truist Securities, BMO Capital Markets, J.P. Morgan, TD Securities, Wells Fargo Securities and US Bancorp are acting as the joint book-running managers for the offering. Regions Securities LLC, BOK Financial Securities, Inc., Citigroup, Huntington Capital Markets, Scotiabank, Zions Capital Markets, Fifth Third Securities, Academy Securities and Ramirez & Co., Inc. are acting as the co-managers for the offering.  The offering is expected to close on or about August 12, 2024, subject to the satisfaction of customary closing conditions. The Notes will be fully and unconditionally guaranteed by Extra Space and certain of its subsidiaries.

The operating partnership intends to use the net proceeds from this offering to repay amounts outstanding from time to time under its lines of credit, and for other general corporate and working capital purposes, including funding potential acquisition opportunities.

The Notes will be issued pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission. This release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale is not permitted. The offering will be made only by means of a prospectus supplement and accompanying prospectus, copies of which, when available, may be obtained from BofA Securities, Inc. NC1-022-02-25, 201 North Tryon Street, Charlotte, NC 28255-0001, Attn: Prospectus Department, email: dg.prospectus_requests@bofa.com, or by telephone: 1-800-294-1322; PNC Capital Markets LLC, 300 Fifth Avenue, Pittsburgh, PA 15222, email: pnccmprospectus@pnc.com, or by telephone: 1-855-881-0697; or Truist Securities, Inc., Attn: Prospectus Department, 3333 Peachtree Road NE, 9th floor, Atlanta, GA 30326, email: TruistSecurities.prospectus@Truist.com, or by telephone: 1-800-685-4786.

A prospectus supplement related to the offering will also be available free of charge on the SEC's website at http://www.sec.gov.

About Extra Space Storage Inc.:

Extra Space Storage Inc., headquartered in Salt Lake City, Utah, is a self-administered and self-managed real estate investment trust and a member of the S&P 500.  As of June 30, 2024, the Company owned and/or operated 3,812 self-storage stores in 42 states and Washington, D.C. The Company's stores comprise approximately 2.6 million units and approximately 292.1 million square feet of rentable space operating under the Extra Space, Life Storage and Storage Express brands. The Company offers customers a wide selection of conveniently located and secure storage units across the country, including boat storage, RV storage and business storage. It is the largest operator of self-storage properties in the United States.

Forward-Looking Statements:

Certain information set forth in this release contains "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements include statements concerning the terms, timing and completion of the offering of securities by Extra Space and the operating partnership, including the anticipated use of proceeds therefrom.  In some cases, forward-looking statements can be identified by terminology such as "believes," "estimates," "expects," "may," "will," "should," "anticipates," or "intends," or the negative of such terms or other comparable terminology, or by discussions of strategy.  All forward-looking statements are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them, but there can be no assurance that management's expectations, beliefs and projections will result or be achieved.  There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in or contemplated by this release.  Such risks and uncertainties include without limitation those associated with market risks and uncertainties and the satisfaction of customary closing conditions for an offering of securities, as well as the risks referenced in the "Risk Factors" section included in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q.  All forward-looking statements apply only as of the date of this release.  We undertake no obligation to publicly update or revise forward-looking statements which may be made to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

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SOURCE Extra Space Storage Inc.

FAQ

What is the interest rate and maturity date of Extra Space Storage's (EXR) new senior notes?

Extra Space Storage's new senior notes have an interest rate of 5.350% and are due to mature on January 15, 2035.

How much did Extra Space Storage (EXR) raise in its senior notes offering?

Extra Space Storage raised $400 million in aggregate principal amount through its senior notes offering.

What will Extra Space Storage (EXR) use the proceeds from the senior notes offering for?

Extra Space Storage intends to use the net proceeds to repay outstanding amounts on its lines of credit, for general corporate purposes, working capital, and potentially funding acquisition opportunities.

When is the expected closing date for Extra Space Storage's (EXR) senior notes offering?

The senior notes offering is expected to close on or about August 12, 2024, subject to customary closing conditions.