New Extra Space slightly outperforms shares; older Extra Space adds; market waits for Fed

By Rebecca Melvin

New York, Sept. 16 – Extra Space Storage Inc.’s newly priced 3.125% exchangeables traded right around par for much of Wednesday after the company priced $500 million of the 20-year senior notes at the cheap end of talked terms.

At late morning, the Extra Space paper was quoted 99.75 bid, 100.25 offered with the underlying shares at $74.48, which was down 34 cents, or about 0.5%.

That was ever so slightly better than the underlying stock, a Connecticut-based trader said.

The older Extra Space 2.375% exchangeables due 2033 were better on the company’s agreement to repurchase $165 million of the outstanding older notes concurrently with the pricing of the new deal.

“The olds were trading around 2 points before, and holders got paid 3.2 points over parity,” the trader said.

Elsewhere, much of the convertible market was described as unchanged on swap. There was a good amount of focus on the new deal, which was of the chunky $500 million base deal size that promises better liquidity going forward than the smaller convertible deals, but it wasn’t the only name trading, a New York-based trader said.

“It wasn’t the only focus, but most guys are waiting until tomorrow to see what the Fed does,” the trader said.

A second New York trader concurred: “The majority of [convertibles] names are unchanged to a little better, generically speaking, as most people are waiting for the Fed.”

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