By Rebecca Melvin
New York, June 18 -Extra Space Storage LP, a subsidiary of Extra Space Storage Inc., priced $250 million of 20-year exchangeable senior notes after the market close Monday at a discount to par, or 98.5, and with a 2.375% coupon and a 30% initial conversion premium, according to market sources.
Pricing came at revised talk, but beyond the cheap end of initial talk, which was for a 1.5% to 2% coupon and a 30% to 35% premium.
The Rule 144A deal has an over-allotment option for a further $37.5 million of notes and was sold by 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.
The securities will be net share settled and have contingent exchange at a trigger of 130% over the exchange price.
The exchangeables have dividend protection for any dividends paid above $0.40 and also have takeover protection.
Extra Space is a Salt Lake City-based real estate investment trust focused on self-storage facilities.
| Issuer: | Extra Space Storage LP
|
| Guarantor: | Extra Space Storage Inc.
|
| Issue: | Exchangeable senior notes
|
| Amount: | $250 million
|
| Greenshoe: | $37.5 million
|
| Maturity: | July 1, 2033
|
| Bookrunners: | Citigroup Global Markets Inc., Wells Fargo Securities LLC
|
| Coupon: | 2.375%
|
| Price: | 98.5, discount to par
|
| Initial exchange premium: | 30%
|
| Initial exchange price: | $55.689
|
| Initial exchange ratio: | 17.9559
|
| Net share settled: | Yes
|
| Contingent exchange: | Yes, at 130%
|
| Calls: | Non-callable until July 5, 2018
|
| Puts: | June 1, 2018, 2023, and 2028
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes, for dividends above $0.40 per quarter
|
| Price talk: | 2.375%, up 30%, revised from 1.5%-2%, up 30%-35%
|
| Pricing date: | June 17
|
| Stock symbol: | NYSE: EXR
|
| Stock reference price: | $42.84 as of close June 17
|
| Distribution: | Rule 144A
|
| Market capitalization: | $4.75 billion
|
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