Extra Space Storage Inc. (EXR, Financial) has successfully completed an underwritten public offering of $500 million in aggregate principal amount of its 5.400% Senior Notes due 2035. This strategic financial maneuver is aimed at bolstering the company's liquidity and optimizing its capital structure.
The Senior Notes, issued by Extra Space Storage LP, a subsidiary of the company, are fully and unconditionally guaranteed by Extra Space Storage Inc., along with ESS Holdings Business Trust I and ESS Holdings Business Trust II. The issuance is governed by an indenture agreement, which includes various restrictive covenants to ensure financial discipline.
Priced at 99.830% of the principal amount, the Notes are senior unsecured obligations, ranking equally with the issuer's other existing and future senior unsecured indebtedness. However, they are subordinated to existing and future mortgage and other secured indebtedness. The Notes will bear interest at a rate of 5.400% per annum, with interest payments scheduled semi-annually on June 15 and December 15, starting in 2025, until the maturity date of June 15, 2035.
The company retains the option to redeem the Notes, either in whole or in part, at its discretion. This flexibility allows Extra Space Storage Inc. to manage its debt portfolio effectively in response to market conditions.
This offering was conducted under an effective shelf registration statement filed with the Securities and Exchange Commission, ensuring compliance with regulatory requirements. The move is expected to provide Extra Space Storage Inc. with enhanced financial flexibility to support its growth initiatives and operational needs.
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