Public Storage (PSA, Financial), a leading self-storage real estate investment trust, has entered into an Equity Distribution Agreement with several major financial institutions, including Morgan Stanley & Co. LLC, BNP Paribas Securities Corp., and others. This agreement allows for the sale of up to $2 billion in common shares, providing the company with enhanced capital flexibility to support its business strategy.
The "at the market" offering program will enable Public Storage to sell its common shares through the appointed managers, acting as sales agents or forward sellers. The proceeds from these sales are intended to fund general corporate purposes, including acquisitions, thereby strengthening the company's financial position in various market conditions.
The shares will be issued under a prospectus supplement filed with the Securities and Exchange Commission, forming part of the company's shelf registration statement. The managers will use their commercially reasonable efforts to sell the shares through ordinary brokers' transactions on the New York Stock Exchange or through privately negotiated transactions.
Public Storage has also made provisions for forward sale agreements with several banks, allowing for additional flexibility in managing its capital needs. The company expects to settle these agreements primarily through the physical delivery of shares, although cash or net-share settlements are also possible.
The compensation for the managers involved in this agreement will be a commission not exceeding 2% of the gross sales price of the shares sold. This strategic financial maneuver is designed to support Public Storage's ongoing growth and acquisition plans, ensuring the company remains well-positioned in the competitive self-storage market.
Should you invest in Public Storage (PSA, Financial) right now? Before you do it, it’s important to understand the business profitability and stock valuations, and find out what the warning signs are about. See the in-depth Public Storage (PSA) stock research here.
