Extra Space gives early results of Life Storage notes exchange offer

By Marisa Wong

Los Angeles, June 20 – Extra Space Storage Inc.’s operating partnership Extra Space Storage LP announced the early results of its June 5 exchange offer and consent solicitation for five series of notes.

The company also amended the offer to extend the deadline for receiving the early participation premium, according to a Tuesday press release.

As previously announced, the company is 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.

As of 5 p.m. ET on June 16, the early consent date, holders had tendered the following for exchange:

• $582,337,000, or 97.06%, of the $600 million outstanding 3.5% senior notes due 2026 (Cusip: 84610WAB1) for new 3.5% senior notes due 2026;

• $437,548,000, or 97.23%, of the $450 million outstanding 3.875% senior notes due 2027 (Cusip: 53227JAA2) for new 3.875% senior notes due 2027;

• $327,564,000, or 93.59%, of the $350 million outstanding 4% senior notes due 2029 (Cusip: 53227JAB0) for new 4% senior notes due 2029;

• $396,924,000, or 99.23%, of the $400 million outstanding 2.2% senior notes due 2030 (Cusip: 53227JAC8) for new 2.2% senior notes due 2030; and

• $599,736,000, or 99.96%, of the $600 million outstanding 2.4% senior notes due 2031 (Cusip: 53227JAD6) for new 2.4% senior notes due 2031.

For each $1,000 principal amount of Life Storage notes tendered for exchange, holders will now be eligible to receive $1,000 principal amount of new Extra Storage notes plus $1.00 in cash until the expiration of the offer at 5 p.m. ET on July 21.

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, the early participation premium was only payable to holders tendering by the early consent date.

In connection with the exchange offers, Extra Space is 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, according to Tuesday’s announcement.

The proposed amendments will become effective on the settlement date, which is expected to be the second business day after the expiration date.

Tenders may be withdrawn at any time prior to the expiration date, and consents delivered after the early consent date may be withdrawn before the expiration of the offer. However, consents delivered prior to the early deadline are irrevocable.

As previously noted, the exchange offers are conditioned on the consummation of the mergers between Extra Space and Life Storage, currently expected to close in the second half of 2023 subject to customary closing conditions; 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 is not, however, conditioned upon the completion of the exchange offer.

The dealer managers for the offers are 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) is the exchange and information agent.

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

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