Public Storage Announces New Preferred Offering

Self storage giant Public Storage (NYSE:PSA) has announced a new preferred stock offering. It was only a matter of time before PSA came to the market as they have a 5.625% (PSA-U) redeemable now and a 5.875% (PSA-A) redeemable in December.

No details are yet known, but reader mcg who wins the early morning trophy today for catching this one early, posits a sub 5% coupon.

The issue will be cumulative, non qualified (as a REIT preferred–REITs pay non qualified distributions). The company states they may use the proceeds to redeem preferred stock–I would bet money they will unquestionably redeem issues.

The preliminary prospectus can be read here.

4 thoughts on “Public Storage Announces New Preferred Offering”

  1. While we all dislike redemption of higher paying shares, I am glad to see these companies refinancing their business models with lower rates. Double edged sword, so to speak.

    1. I am not. Why? What are they doing with that money is the key question. As an example, Apple is coming back into the debt market. Why? To buy back more common stock. It seems the low the rates go, the more companies engage in this type of behavior.

      I stick to simple truths. Borrowing money to buy stock is high risk. I never buy on margin. Company CFOs/CEO’s who think this is an awesome idea are NOT in my fan club. We have record corporate debt ( in addition to student loan and govt. debt)

      If a company likes Public storage wants to become stronger than is good. If that allows them to grow the business EVEN better. If they want to buy back common stock – don’t like it.

      Of course, we are unlikely to know if it’s buying back common stock , the good old “general administrative sexpenses” verbiage hides that for all of us.

      1. With my rant put aside, seems like Public Storage is being a good stewart of the business unlike some.

        MY comment above was a general comment

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