Extra Space reports results of Life Storage notes exchange offer

By Mary-Katherine Stinson

Lexington, Ky., July 24 – Extra Space Storage Inc. operating partnership Extra Space Storage LP announced the results of its June 5 exchange offer and consent solicitation for five series of notes.

As previously announced, the company was offering to exchange notes from five series, issued by Life Storage LP and guaranteed by Life Storage, Inc., for notes to be issued by Extra Space LP and guaranteed by Extra Space Storage Inc. and subsidiaries ESS Holdings Business Trust I and ESS Holdings Business Trust II.

At the expiration of the offer at 5 p.m. ET on July 21, holders had tendered the following for exchange:

• $582,627,000, or 97.1%, of the $600 million outstanding 3.5% senior notes due 2026 (Cusip: 84610WAB1) for new 3.5% senior notes due 2026 with $582,337,000 of the notes, or 97.06%, being tendered by the early consent date;

• $440,493,000, or 97.89%, of the $450 million outstanding 3.875% senior notes due 2027 (Cusip: 53227JAA2) for new 3.875% senior notes due 2027 with $437,548,000 of the notes, or 97.23%, being tendered by the early consent date;

• $331,223,000, or 94.64%, of the $350 million outstanding 4% senior notes due 2029 (Cusip: 53227JAB0) for new 4% senior notes due 2029 with $327,564,000 of the notes, or 93.59%, being tendered by the early consent date;

• $397,007,000, or 99.25%, of the $400 million outstanding 2.2% senior notes due 2030 (Cusip: 53227JAC8) for new 2.2% senior notes due 2030 with $396,924,000 of the notes, or 99.23%, being tendered by the early consent date; and

• $599,788,000, or 99.96%, of the $600 million outstanding 2.4% senior notes due 2031 (Cusip: 53227JAD6) for new 2.4% senior notes due 2031 with $599,736,000, or 99.96%, being tendered by the early consent date.

For each $1,000 principal amount of Life Storage notes tendered for exchange, holders will receive $1,000 principal amount of new Extra Storage notes plus $1.00 in cash. The company announced on June 20 it had amended the offer to extend the deadline for receiving the early participation premium, according to a press release.

The total consideration includes an early participation premium of $30 principal amount of new Extra Storage notes per $1,000 of existing Life Storage notes tendered. Previously, when the offer was launched on June 5, the early participation premium was only payable to holders tendering by the early consent date.

In connection with the exchange offers, Extra Space was also soliciting consents from Life Storage noteholders to amend the Life Storage notes’ indenture to eliminate substantially all of the restrictive covenants and any of Life Storage's reporting obligations other than those required by law.

Extra Space said it received consents from holders of a majority of each series of Life Storage notes, enough to approve the proposed amendments by the early consent date, according to a June 20 announcement.

The proposed amendments will become effective on the settlement date, which is expected for July 25.

The conditions for consummating the offer have been met.

As previously noted, the exchange offers were conditioned on the consummation of the mergers between Extra Space and Life Storage, which closed July 20; receipt of consents from holders of a majority of the outstanding aggregate principal amount of each series of Life Storage notes; and the tender of a majority in aggregate principal amount of the Life Storage notes not held by Life Storage or any person controlled by Life Storage as of the expiration date.

Closing of the mergers was not, however, conditioned upon the completion of the exchange offer.

The dealer managers for the offers were TD Securities (USA) LLC (866 584-2096, 212 827-2842, LM@tdsecurities.com), U.S. Bancorp Investments, Inc. (800 479-3441, 917 558-2756, liabilitymanagement@usbank.com) and Wells Fargo Securities, LLC (866 309-6316, 704 410-4759, liabilitymanagement@wellsfargo.com).

D.F. King & Co., Inc. (212 269-5550, 800 859-8508, extraspace@dfking.com) was the exchange and information agent.

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

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