Storage Giant Public Storage Announces New Preferred

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

This issue will be cumulative, non qualified and investment grade rated.

The company may use the proceeds of this offering to redeem the 5.375% perpetual preferred (PSA-V) which has been redeemable since 9/20/2017.

The new issue will have a permanent ticker of PSA-L when it hits the permanent exchange after a stint on the OTC grey market (temporary ticker not yet announced).

The preliminary prospectus can be found here.

All of the outstanding Public Storage issues can bne seen here.

Thanks to mcg for being on this early and for EarlyBird for posited ‘yield talk’ in the 4.75% area.

16 thoughts on “Storage Giant Public Storage Announces New Preferred”

  1. Not sure that you will reach the same ridiculous levels, but here is a warning of how things are in Europe after 7 years of NIRP/ZIRP etc. This is a new issuance from yesterday:

    Deutche Börse issued an €600 mio. 27NC7 hybrid, that was priced at 1,25%, after IPT in the 1,875%-2% area. Book was 7x oversubscriped.

    In Europe we have very few prefs, but corporate perps instead. They are “normally” called at 1st call – unless the company is in dire trouble. But no guarantees of course. Deutche Börse has a prime CR (AA), so this issue can only be compared with the best CEF prefs. etc.

  2. PSA is conspicuous for it’s good timing on preferred issues and wringing every bloody basis point out of investors.

    4.625% on a non-QDI issue? Oy.

    I take this issuance as a signal that it’s great time to be selling preferred and not so great to be buying.

    Maybe a flip.

    1. Bob, they are pros at beating you down with a call, reissuing a new lower yield….and making you like it! I have a little cash built up. Find me a great deal so I can put it to work…Because I sure cant find one.

      1. I can’t even find a mediocre deal. Selective selling on vastly overpriced FI, selective buying in beaten down equities, and small ball flips and same issuer trades.

        Nothing worth of a novel but it pays some bills.

  3. The new guy on the block, writing from just outside our nation’s fun-filled capital. Long-time fan of this site and its earlier versions, but first time commenter. This comment is technically off topic, PSA-wise, but relevent, I think, for some.

    Utility compeny SPKE has just upped the ante with regard to its earlier and rather pathetic tender offer to take SPKEP shares off our hands at $18.00 per share. Now, we can unload our shares for the new-and-improved price of $22.00 apiece. According to material I just received via Schwab, we have until June 15 to decide. Here’s the relevant part of the offer text I received from Schwab online:

    “Spark Energy, Inc. (the Company) has amended and extended its offer to purchase for cash up to 1,000,000 shares of its outstanding 8.75% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Stock (the Series A Preferred Stock) at an amended purchase price of $22.00 per share (increased from $18.00), less any applicable withholding taxes and without interest.

    “If more than 1,000,000 of the Company’s outstanding Series A Preferred Stock are validly tendered and not withdrawn, the Company will purchase shares on a pro rata basis with appropriate adjustments to avoid the purchase of fractional shares.”

    This has been a wobbly preferred issue with a great dividend. I’m inclined to hold, but might change my mind. Today’s offer is clearly better. But I’d still prefer getting par value before getting on the exit ramp. Open to your thoughts. Have a great Mondy, as last week’s rally continues. For now…

    1. Wonker–since it now trading at 23 you don’t have to be concerned with this offer. I held a bit for a couple years but got out some time ago around 25–too many wild rides for conservative types like me. Reputationally Spark, like Just Energy are not well thought of. The financials are fairly dicey–I see last quarter sales were off 30%–I didn’t read details. The level of risk on this issue just holds no attraction for someone like me.

      1. Thanks, Tim. This one, fortunately, is my highest risk issue by far. The overall market environment today is weird, since you never know anymore whether the Fed is going to bail out any given company or buy its bonds.

        Meanwhile, thanks for keeping up a great site.

    2. Spark is just a poor business. High risk is one thing – I have made many private equity investments in my time – but I just don’t purchase companies with a business model that has no durability.

      That’s my non reply.

  4. I show the YTC on PSA K is 4.15 ish w a 4.75 coupon callable 2014. The 4.70 is a 430 ytc….so this would be the highest YTC of all 13, erh 14. Being a rate ho I’ve never done much w PSA’s but this one looks OK comparatively speaking.

    Will say 1 good thing about them, they do things in a moderate thoughtful way…..& limit the size of these issues 10-12 million float

  5. PSA has been one of my long-time favorite preferred stocks due to their quality management and very low leverage. Their preferreds have made it through 9/11, the 08-09 financial crisis and COVID-19 without a scratch or dent (as long as people did not sell). Due to the low coupon rates now, I only hold them in my retirement accounts so that I don’t have to pay income tax in the dividends until funds are taken out of the account – probably many, many years down the road.

  6. Curious that the 13 outstanding PSA- series are all down, many of them more than PSA-V, some down nearly 1.5%. I suppose it is speculation on the new one and specifically the yield on the new one. Some of them got caught too far above par.

    I suspect PSA would be considered a Sock Drawer item — maybe it’s time for a few more socks.

    1. Dave in Texas – good observation. A number of the issues are callable now, but investors pushed those shares up over $26 in the past two weeks. I own a chunk of the PSA-W callable at any time and trading at $25.48. However, it goes ex-dividend in a few days so it is really not worth selling right now. QuantumOnline.com is the website I normally try to use when researching preferred issues as it is very user friendly.

      1. Now I’m curious… Do companies have to call preferreds in date-callable order? In other words, do they have to call the callable-in-2017 series before they call the callable-in-2018 series? Or can they go in whatever order they want (presumably highest-yield-first)?

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