Terms

Series

Series O

Liquidation Preference

$25.00

Rate Type

Fixed

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

April 1, 2015

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Debt Obligations Of Public Storage; Pari Passu With: Other Series Of Preferred Shares Of Beneficial Interest; Senior To: Common Shares Of Beneficial Interest

Regulatory (Basel III) Call

Yes

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Depositary Share Fraction

0.001

Prospectus Summary

Public Storage is offering depositary shares, each representing 1/1,000th of a share of its Series O Cumulative Preferred Share of Beneficial Interest, with a liquidation preference equivalent to $25.00 per depositary share. The coupon rate was not specified in this preliminary filing, but dividends are cumulative and paid quarterly beginning June 30, 2010. Being cumulative means that if Public Storage skips or defers a dividend payment, all unpaid dividends must be made whole before any distributions can be paid to common shareholders. The shares are perpetual with no stated maturity and are not convertible. The issuer may not redeem them before approximately April 2015 (exact day left blank), after which it may redeem at $25.00 per depositary share plus accrued distributions. The Series O preferred shares rank senior to Public Storage's common shares and on a parity with its other outstanding preferred share series, but junior to all of the trust's debt obligations. As a holding trust issuing at the operating entity level, structural subordination risk is relatively contained. Importantly, Public Storage retains the right to redeem the preferred shares prior to the April 2015 call date solely to preserve its REIT qualification under federal tax law — a REIT-qualification call rather than a bank regulatory capital trigger. Investors should be aware that this early redemption right, while narrow, could accelerate the return of capital in adverse tax-law scenarios. Because Public Storage is a REIT, distributions on the Series O depositary shares generally do not qualify for the preferential 15%/20% qualified dividend income (QDI) rate available to most corporate preferred stock investors, nor for the dividends-received deduction (DRD) for corporate holders. Instead, distributions are treated as REIT pass-through income, which is taxed at ordinary income rates for most U.S. investors. Dividends are paid quarterly, with the first payment on June 30, 2010 prorated from issuance. If Public Storage fails to pay distributions for six or more quarters, preferred holders gain limited voting rights — the primary contractual mechanism protecting income investors from prolonged payment interruptions.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Public Storage fails to pay cumulative distributions for six or more quarters, preferred holders gain limited voting rights; no explicit stopper on common dividends is described in the provided text, though standard REIT preferred terms would restrict common distributions when preferred dividends are in arrears.

Other Preferreds from Public Storage

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 42 (Average)