New Issue: Extra Space sells $600 million 5.4% 10-year notes at 135 bps spread

By Wendy Van Sickle

Columbus, Ohio, Jan. 16 – Extra Space Storage LP sold $600 million of 5.4% 10-year senior notes (Baa2/BBB+) at 99.745 to yield 5.433% on Tuesday, according to an FWP filing with the Securities and Exchange Commission.

The notes priced with a Treasuries plus 135 basis points spread.

Wells Fargo Securities, LLC, TD Securities (USA) LLC, BofA Securities, Inc., BMO Capital Markets Corp., J.P. Morgan Securities LLC, PNC Capital Markets LLC, Truist Securities, Inc. and U.S. Bancorp Investments, Inc. are the bookrunners.

The notes are guaranteed by Extra Space Storage, Inc., ESS Holdings Business Trust I and ESS Holdings Business Trust II.

Extra Space intends to use roughly half of the net proceeds of this offering to repay a portion of its $400 million tranche 8 term loan and the remainder to repay amounts outstanding under the company’s lines of credit, and for other general corporate and working capital purposes, including funding potential acquisitions.

As of Jan. 16, Extra Space’s tranche 8 term loan bears interest at adjusted daily simple SOFR plus 85 bps (6.33% as of Dec. 31) and matures on June 22, 2024.

The operating partnership’s lines of credit include a secured line of credit up to $140 million, of which about $43 million is drawn. It bears interest at SOFR plus 135 bps (6.73% as of Dec. 31) and matures on July 1, 2026. The partnership also has an unsecured line of credit with a capacity of up to $2 billion, of which about $662 million is drawn, which bears interest at adjusted daily simple SOFR plus 77.5 bps (6.26% as of Dec. 31), maturing on June 22, 2027.

The self-storage real estate investment trust has headquarters in Salt Lake City.

Issuer:	Extra Space Storage LP
Guarantors:	Extra Space Storage, Inc., ESS Holdings Business Trust I and ESS Holdings Business Trust II
Amount:	$600 million
Issue:	Senior notes
Maturity:	Feb. 1, 2034
Bookrunners:	Wells Fargo Securities, LLC, TD Securities (USA) LLC, BofA Securities, Inc., BMO Capital Markets Corp., J.P. Morgan Securities LLC, PNC Capital Markets LLC, Truist	Securities, Inc. and U.S. Bancorp Investments, Inc.
Co-managers:	Regions Securities LLC, BOK Financial Securities, Inc., Citigroup Global Markets Inc., Huntington Securities, Inc., Scotia Capital (USA) Inc., Zions Direct, Inc., Fifth Third Securities, Inc., Academy Securities, Inc. and Samuel A. Ramirez & Co., Inc.
Trustee:	Computershare Trust Co., NA
Counsel to issuer:	Latham & Watkins LLP, Venable LLP (Maryland law) and Verrill Dana LLP (Massachusetts law)
Counsel to underwriters:	Fried, Frank, Harris, Shriver & Jacobson LLP with Ballard Spahr LLP for Maryland law
Coupon:	5.4%
Price:	99.745
Yield:	5.433%
Spread:	Treasuries plus 135 bps
Call features:	Make-whole call at Treasuries plus 25 bps until Nov. 1, 2033; thereafter at par
Trade date:	Jan. 16
Settlement date:	Jan. 19
Ratings:	Moody’s: Baa2
	S&P: BBB+
Distribution:	SEC registered
Cusip:	30225VAS6

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