Extra Space Storage issues $500M in senior notes

Extra Space Storage Inc. (NYSE:EXR), a prominent player in the Specialized REITs industry with a market capitalization of $32.5 billion and annual revenue of $3.3 billion, has entered into a significant financial agreement involving the issuance of senior notes. According to InvestingPro data, the company maintains strong financial health with a GOOD overall score, supported by its 22-year track record of consistent dividend payments. Today, Extra Space Storage LP, a subsidiary of the company, completed the public offering of $500 million in aggregate principal amount of its 5.400% Senior Notes due 2035.

The offering’s proceeds will be subject to a guarantee by Extra Space Storage Inc. and two Massachusetts business trusts associated with the company. The notes, which are unsecured senior obligations, will rank equally with the issuer’s other senior unsecured debt. These notes are effectively subordinated to any of the issuer’s secured debt and to liabilities of certain subsidiaries and equity interests not held by the issuer. InvestingPro analysis shows the company maintains a healthy current ratio of 1.33, indicating sufficient liquid assets to meet short-term obligations.

Interest on the notes is set at an annual rate of 5.400%, with payments due semi-annually starting June 15, 2025, and continuing until the maturity date of June 15, 2035. The issuer reserves the right to redeem the notes, in whole or in part, at any time at its discretion, with the redemption price being the greater of the principal amount or a make-whole premium as stipulated in the indenture.

The indenture governing the notes includes restrictive covenants that limit the issuer’s and its subsidiaries’ ability to incur additional debt and mandate the maintenance of a pool of unencumbered assets.

In the event of default, which includes failure to pay interest or principal, non-compliance with agreements, or bankruptcy-related occurrences, the maturity of the notes may be accelerated, making the outstanding amount due immediately.

The notes were issued under an effective shelf registration statement and are listed on the New York Stock Exchange. Legal opinions regarding the validity of the notes and related guarantees have been filed as exhibits to the SEC filing, which serves as the basis for this report. The information disclosed is based on a press release statement and the recent SEC filing by Extra Space Storage Inc. Based on InvestingPro’s comprehensive analysis, which includes over 30 financial metrics and exclusive insights available in their Pro Research Report, the company currently appears to be trading at a premium to its Fair Value. Investors seeking deeper insights into Extra Space Storage’s financial health, valuation metrics, and growth prospects can access the full analysis through InvestingPro’s detailed company report.

In other recent news, Extra Space Storage Inc. reported its fourth-quarter 2024 earnings, exceeding earnings per share (EPS) expectations but slightly missing revenue forecasts. The company achieved an EPS of $1.24, surpassing the forecasted $1.07, while revenue amounted to $821.89 million, just below the anticipated $825.25 million. Despite the positive EPS results, investor concerns about the revenue miss were evident. The company has set its 2025 Core Funds From Operations (FFO) guidance between $8.00 and $8.30 per share. Extra Space Storage also maintained industry-leading occupancy rates, which is a positive indicator amidst challenging market conditions. The company invested $950 million in 2024 and originated $980 million in bridge loans, highlighting its strategic focus on growth. Analysts noted that the company’s forward guidance reflects cautious optimism, with expectations of modest improvements in new customer rates. Extra Space Storage’s management acknowledged potential challenges, including property tax increases and competitive pressures.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.