Self storage giant Public Storage (PSA) has announced the pricing of their new preferred issue.
The coupon will be 4.75%, which is in line with the other recent issues from PSA. Proceeds are to redeem the 5.875% PSA-A issue on 12/30/2019.
Being a REIT the issue is cumulative and non qualified.
The issue is rated A3 from Moodys and
BBB+ by S&P.
Trading begins immediately on the OTC Grey market under ticker PBSGZ.
The pricing term sheet can be read here.
I bought PSA-V today at 25.09
Hoping it does not get called…but, not a big loss if it does.
Caveat emptor: PSA-I, which was trading over $26 in October, is now trading around $25.29. Coupon is 4.875.
I thought PSA-I got a little ahead of itself earlier, but in October the 10yr Treasury was 1.5%, and 4.875% on a issue with an A3 Moodys rating and couldn’t be called for 5 years looked attractive even at 104% of the call price.
The hot air has come out of a lot of these issues and the call risk (a real danger with PSA) is much reduced.
Derek–these sub 5% issues are having plenty of trouble getting traction in here. I note the PS Business Parks new issue (PSB-Z) 4.875% is trading at $24.52 after hitting 25.20 early on.
https://innovativeincomeinvestor.com/security/ps-business-parks-4-875-cumulative-preferred-stock-series-z/
fidelity will begin selling it on december 20th
Picked some up on fidelity this morning
Hey bro–is this going to be a ‘flip’ or hold it forever?
Can anyone tell me how PSA preferreds traded in ‘08 crisis. I didn’t own any preferreds back then and I wonder how this very safe company traded then. I had a big position in TLT that year and it worked out very well. Thanks in advance, ATB.
Tim H – I actually owned some PSA preferreds during the financial crisis. Based on memory, a number of the issues traded down to the $14 to $17 range depending on their coupon rate.
Thanks, having cash to buy bargains in those major sell offs is helpful.
I don’t think they’ve ever come to market with a rate you’d call generous
If You Prefer – actually, in the good old days, Public Storage had some pretty good coupon rates. I’ve been investing in preferreds since the late 1990’s (so 20+ years) and one of my best holdings from about 2003 until it was called in 2010 was an old PSA-V issue with a coupon rate of 7.50%. Those were the days…..
Great company with incredibly stable income and earnings, but the new coupon rate is just too skimpy for me. However, it could make sense for some older individuals looking for income.
I love this company but just can’t bring myself to go under 5% and with it trading above par (slightly) the yield is even lower. If Fed is done cutting interest rates these sub 5s could take a beating in price in the future. True?
Franklin–the way I am handling the low coupon issues now is if I want them I just do a small purchase and tack on as we go. With no commissions it is a reasonable approach.