Extra Space to price $250 million 20-year exchangeables talked at 1.5%-2%, up 30%-35%

By Rebecca Melvin

New York, June 17 - Extra Space Storage LP, a subsidiary of Extra Space Storage Inc., plans to price $250 million of 20-year exchangeable senior notes after the market close Monday that were talked at a coupon of 1.5% to 2% and an initial exchange premium of 30% to 35%, according to market sources.

The Rule 144A deal has an over-allotment option for a further $37.5 million of notes and was being sold via joint bookrunning managers Citigroup Global Markets Inc. and Wells Fargo Securities LLC.

Proceeds will be used to fund a previously announced acquisition and to repay outstanding debt under the company's secured lines of credit and for general corporate and working capital purposes.

The exchangeables will be non-callable until July 5, 2018. They are putable in years five, 10 and 15, on July 1 of 2018, 2023 and 2028.

There is contingent exchange at a trigger of 130%, as well as net share settlement.

The exchangeables have dividend protection for any dividends paid above $0.40 and takeover protection.

Extra Space is a Salt Lake City-based real estate investment trust focused on self-storage facilities.

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