Extra Space plans $500 million 20-year exchangeables to yield 2.625%-3.125%, up 27.5%-32.5%

By Rebecca Melvin

New York, Sept. 14 – Extra Space Storage LP, a subsidiary of Extra Space Storage Inc., plans to price $500 million of 20-year exchangeable senior notes after the market close Tuesday that were talked at a coupon of 2.625% to 3.125% and an initial exchange premium of 27.5% to 32.5%, according to market sources.

The Rule 144A deal has an over-allotment option for a further $75 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 potential acquisitions, including its previously announced acquisition of SmartStop Self Storage, Inc., to retire outstanding debt and for other general corporate and working capital purposes.

The exchangeables will be non-callable for five years. They are putable in years five, 10 and 15.

The exchangeables have dividend protection for any dividends paid above $0.59 per share and takeover protection. They also have net share settlement.

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

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