Storage Giant Public Storage Coming with Another New Preferred

Giant REIT storage company Public Storage (PSA) is coming with a new preferred offering. It is never a surprise when PSA sells a new issue in a refi transaction and it is highly likely they will call the PSA-A 5.875% issue which becomes redeemable on 12/2/2019.

PSA just sold PSA-I 4.875% preferred in September–so you know this one will be around 4.75%. The PSA-I issue has traded very strong–up to $26.50 before setting back to the $25.85 area.

The new issue will be cumulative, non qualified and investment grade.

The preliminary prospectus can be read here.

Thanks to those that flagged this one right away in various spots on this website.

13 thoughts on “Storage Giant Public Storage Coming with Another New Preferred”

  1. I’m enjoying learning about preferred stocks from your site. I’m trying to find info on the chk-d issue that plummeted today along with the common. Your site doesn’t mention it on any list I found. I’m thinking it’s not a $25 issue? Does anyone around here think it’s worth a look at these prices?

  2. If rates go to 3% on preferreds then the traditional financial industry will be in real trouble. Think of being a life insurance CFO with a huge block of life insurance in force with 3% minimum guarantees from the old days and the 30 year treasury is 2.0%? This is a real problem and most insurers are flipping every switch they can (higher mortality costs, etc.). I have seen some fixed index annuities lately that would make you just tear up on how these guys can still sell this stuff.

    Got some extra time, research the S&P 500 Low Vol 5% Risk Control Index. Most fixed annuities that use this index have a participation cap of 35% on returns too.

  3. As Yogi Berra used to say “prediction is hard … especially about the future.” But that said, it feels to me like we might be at a bottom in rates on new preferreds … with all these companies rushing to get the 4.75% rate it’ s beginning to feel like a stampede. And when the herd goes one way, sometimes its better to go in another direction. With the 10 yr Treasury creeping up and stocks rallying, it just feels like a bottom, or close to it, to me. I know this is probably a contrary opinion however.

    1. kapil–certainly we could be looking back in 10-15 years and see some of these yet outstanding–or we could be getting new issues at 3%–yikes

      1. They pay better than those annuities people get conned into buying. And they’re tradable. But I’m not a buyer at these rates. Got some in the 5.2-5.6% range where I’m considering taking the profit.

        1. @Martin G.

          Annuities? Isn’t that where you give an insurance company a big chunk of money, they pay it back in little pieces and then keep the rest when you die? Ooooh, those annuities!

          On selling the preferreds, I’m keeping mine until they’re called because I bought them in the low 20s. Effective yield is 6% +. Where you gonna get that kind of a return nowadays?

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