Public Storage Announces New Preferred Issue

Giant self storage REIT Public Storage (NYSE:PSA) has announced a new issue of perpetual preferred stock.

Recall that PSA just called for redemption PSA-Y which had a coupon of 6.375%. PSA must sell more preferreds OR raise the dividend for the common shares in order to continue to pay out REIT required 90% taxable income to equity holders.

Preliminary information can be found here.

It will be interesting to see what this coupon will be since the company is BBB+ rated by S&P and A3 by Moodys. I think it will come in around 5.50%.

2 thoughts on “Public Storage Announces New Preferred Issue”

  1. I held PSA-C in 2016-17. I sold it, I think I started following the chatter of the flippers and I got the impression either the 5.125% coupon was too low or the price of 25.41 that I got by selling, was too high. Whatever that means.

    I reformed my behavior, for example I later bought DLR-J (5.25%) with the proceeds when DLR-G (5.875%) was redeemed. And still hold it.

    Tim, are you saying that they don’t need to sell more preferred’s, except that it gives them a place to “get rid of” their income? Please explain.

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