[8-K] Public Storage Reports Material Event
Public Storage (PSA) – Form 8-K, Item 1.01 (Material Definitive Agreement)
On 26 June 2025, Public Storage and its operating subsidiary, Public Storage Operating Company (PSOC), executed an underwriting agreement with BofA Securities and Wells Fargo Securities for a two-tranche senior note offering totaling $875 million. The notes will be issued by PSOC and fully guaranteed by Public Storage.
Tranche structure
- $475 million 4.375% senior notes due 1 July 2030, priced at 99.707% of par; interest payable semi-annually on 1 January and 1 July, beginning 1 January 2026.
- $400 million 5.000% senior notes due 1 July 2035, priced at 99.557% of par; interest payable on the same semi-annual schedule.
Offering mechanics – The issuance is being made under the shelf registration statement on Form S-3 (File Nos. 333-283556 & 333-283556-01) and a preliminary prospectus supplement filed on 26 June 2025. Closing is expected on 30 June 2025, subject to customary conditions.
Use of proceeds – PSOC plans to apply the net proceeds (i) to repay its outstanding $400 million floating-rate senior notes maturing in 2025 and (ii) for general corporate purposes, including additional self-storage acquisitions and repayment of other debt.
Counterparties & relationships – The underwriting syndicate is led by BofA Securities and Wells Fargo Securities, both of which, along with several other underwriters, are lenders under PSOC’s revolving credit facility and have provided prior banking services to the company.
Exhibits filed include the Underwriting Agreement (Ex. 1.1), legal opinion and consent (Ex. 5.1 & 23.1), and the XBRL cover page file (Ex. 104).
Key investor takeaway – The transaction extends PSA’s debt maturity profile to 2030/2035, addresses the imminent 2025 note maturity, and provides incremental capital for growth initiatives.
- Refinances the full $400 million floating-rate notes due 2025, removing near-term maturity risk.
- Extends debt ladder with new fixed-rate obligations maturing in 2030 and 2035, enhancing duration profile.
- Provides additional liquidity for self-storage acquisitions and other corporate purposes without immediate equity dilution.
- Increases gross debt by approximately $475 million, adding long-term coupon obligations of 4.375% and 5.000% through 2035.
Insights
TL;DR: PSA locks in $875 m fixed-rate funding, retires 2025 debt, modestly ups leverage; credit profile stable, execution routine.
The two-tranche issuance moves PSA’s nearest unsecured maturity from 2025 out to 2030 while adding an additional $475 m of gross debt capital. Coupons of 4.375% (5-yr UST + ~110 bps) and 5.000% (10-yr UST + ~150 bps) align with current BBB+ REIT spreads, indicating efficient market execution. Pricing slightly below par minimises original-issue discount cost. Proceeds earmarked for repayment of the $400 m floating-rate notes eliminate short-term refinancing risk and fix interest expense. Remaining funds enhance liquidity for self-storage acquisitions—consistent with PSA’s growth strategy—but lift total leverage. No covenant changes or unusual indemnities were noted; the underwriting agreement follows standard REIT bond documentation. Overall, the filing is credit-neutral to mildly positive, primarily by removing a 2025 maturity overhang.
TL;DR: Refinancing extends maturities and funds expansion; leverage edges higher but within typical PSA tolerance—net positive for shareholders.
Public Storage maintains its conservative balance sheet yet secures additional capital for property acquisitions at a point where self-storage deal flow remains robust. The fixed-rate structure mitigates exposure to rising short-term rates, while the staggered 2030/2035 maturities preserve laddering discipline. Although the $875 m raise exceeds the $400 m being retired, PSA historically deploys excess cash accretively through value-add acquisitions, and the filing cites this use explicitly. Nothing in the agreement suggests dilution to common or preferred equity. From an equity investor’s lens, the transaction shores up liquidity and reinforces growth optionality, outweighing the incremental interest burden.
FAQ
When will Public Storage (PSA) close its $875 million senior note offering?
What are the interest rates and maturities of PSA's new senior notes?
How will PSA use the proceeds from the note issuance?
Who are the joint book-running managers for the offering?
When will PSA begin interest payments on the new notes?
Under which SEC registration statement was the offering made?
