| Item 1.01 | Entry into a Material Definitive Agreement. |
On October 7, 2021, Life Storage LP (the
“
Operating Partnership”) completed the issuance and sale of $600 million aggregate principal amount of the Operating Partnership’s 2.400% senior notes due October 15, 2031 (the “Notes”). Life Storage, Inc. (the “Company”) fully and unconditionally guarantees the payment of principal, premium, if any, and interest on the Notes (the “Guarantee”). The net proceeds to the Operating Partnership from the sale of the Notes, after deducting the underwriters’ discount and offering expenses payable by the Operating Partnership, are estimated to be approximately $589.4 million.
The Operating Partnership intends to use net proceeds from the offering for general corporate purposes, which may include funding future acquisitions of self-storage properties, including acquisitions under contract to the extent such transactions close, and repaying indebtedness.
The Notes were issued under the indenture, dated as of June 20, 2016 (the “Base Indenture”), as supplemented by the Fifth Supplemental Indenture dated as of October 7, 2021 (the “Fifth Supplemental Indenture,” and together with the Base Indenture, the “Indenture”), among the Company, the Operating Partnership and Wells Fargo Bank, National Association, as trustee.
The Notes will bear interest at the rate of 2.400% per annum, with interest payable in cash semi-annually in arrears on April 15 and October 15 of each year, commencing April 15, 2022. The Notes will mature on October 15, 2031.
The Notes are senior unsecured indebtedness of the Operating Partnership, ranking equally in right of payment with all of the Operating Partnership’s other senior unsecured indebtedness outstanding from time to time.
The Operating Partnership may redeem the Notes, at any time and from time to time, prior to July 15, 2031 (the “Par Call Date”), in whole or in part, at a make-whole redemption price equal to the greater of (i) 100% of the principal amount of the Notes then outstanding to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed (not including any accrued or unpaid interest), assuming that such Notes mature on the Par Call Date, discounted to the date of redemption on a semi-annual basis at a rate equal to the Adjusted Treasury Rate (as defined in the Fifth Supplemental Indenture) plus fifteen (15) basis points, in each case, plus accrued and unpaid interest to, but not including, the redemption date.
On and after the Par Call Date, the Operating Partnership may redeem the Notes at any time in whole or in part and from time to time at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest on the principal amount of the Notes being redeemed to, but not including, the redemption date.
