| Item 1.01 | Entry into a Material Definitive Agreement. |
The information set forth in Item 2.03 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On July 25, 2023, Extra Space Storage LP (“Extra Space OP”), a Delaware limited partnership and a subsidiary of Extra Space Storage Inc. (the “Company”), completed its previously announced offers to exchange (the “Exchange Offers”) certain debt securities of Life Storage LP, a Delaware limited partnership (“LSI”) and a subsidiary of Life Storage LLC (f/k/a Life Storage, Inc.), a Maryland limited liability company (“LSI Parent”), for certain debt securities issued by Extra Space OP. The Exchange Offers consisted of an offer to exchange (i) any and all of LSI’s outstanding 3.500% Senior Notes due 2026 (the “2026 Notes”) for Extra Space OP’s 3.500% Senior Notes due 2026 (the “New 2026 Notes”), (ii) any and all of LSI’s outstanding 3.875% Senior Notes due 2027 (the “2027 Notes”) for Extra Space OP’s 3.875% Senior Notes due 2027 (the “New 2027 Notes”), (iii) any and all of LSI’s outstanding 4.000% Senior Notes due 2029 (the “2029 Notes”) for Extra Space OP’s 4.000% Senior Notes due 2029 (the “New 2029 Notes”), (iv) any and all of LSI’s outstanding 2.200% Senior Notes due 2030 (the “2030 Notes”) for Extra Space OP’s 2.200% Senior Notes due 2030 (the “New 2030 Notes”) and (v) any and all of LSI’s outstanding 2.400% Senior Notes due 2031 (the “2031 Notes” and, together with the 2026 Notes, the 2027 Notes, the 2029 Notes and the 2030 Notes, the “LSI Notes”) for Extra Space OP’s 2.400% Senior Notes due 2031 (the “New 2031 Notes” and, together with the New 2026 Notes, the New 2027 Notes, the New 2029 Notes and the New 2030 Notes, the “New Notes”). Pursuant to the Exchange Offers, the aggregate principal amounts of the LSI Notes set forth below were tendered and subsequently cancelled, and the New Notes were issued in the same aggregate principal amounts:
| | • | | $582,627,000 aggregate principal amount of 2026 Notes; |
| | • | | $440,493,000 aggregate principal amount of 2027 Notes; |
| | • | | $331,223,000 aggregate principal amount of 2029 Notes; |
| | • | | $397,007,000 aggregate principal amount of 2030 Notes; and |
| | • | | $599,788,000 aggregate principal amount of 2031 Notes. |
Following such cancellation, $48,862,000 aggregate principal amount of LSI Notes remain outstanding across the five series. In connection with the Exchange Offers, LSI and LSI Parent entered into a Sixth Supplemental Indenture, dated as of July 25, 2023 (the “LSI Supplemental Indenture”), by and between LSI, as issuer, LSI Parent, as parent guarantor, and Computershare Trust Company, N.A., as trustee, to eliminate (1) substantially all of the restrictive covenants applicable to the LSI Notes and (2) any of LSI and LSI Parent’s reporting obligations under the LSI Notes other than those required by applicable law. The description of the LSI Supplemental Indenture in this Current Report on Form 8-K is a summary and is qualified in its entirety by the full text of the LSI Supplemental Indenture, a copy of which is filed as Exhibit 4.2 hereto, and is incorporated herein by reference.
The New Notes are fully and unconditionally guaranteed (the “Guarantees”) by the Company, ESS Holdings Business Trust I, a Massachusetts business trust (“EHBT I”), and ESS Holdings Business Trust II, a Massachusetts business trust (“EHBT II” and, together with EHBT I and the Company, the “Guarantors”). The terms of the New Notes are governed by an indenture, dated as of May 11, 2021 (the “Base Indenture”), by and among Extra Space OP, the Guarantors and Computershare Trust Company, N.A. (as successor trustee to Wells Fargo Bank, National Association), as trustee (the “Trustee”), as supplemented by (i) the Sixth Supplemental Indenture with respect to the New 2026 Notes, dated as of July 25, 2023, (ii) the Seventh Supplemental Indenture with respect to the New 2027 Notes, dated as of July 25, 2023, (iii) the Eighth Supplemental Indenture with respect to the New 2029 Notes, dated as of July 25, 2023, (iv) the Ninth Supplemental Indenture with respect to the New 2030 Notes, dated as of July 25, 2023 and (v) the Tenth Supplemental Indenture with respect to the New 2031 Notes, dated as of July 25, 2023 (each, a “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). The Indenture contains various restrictive covenants, including limitations on the ability of Extra Space OP and its subsidiaries to incur additional indebtedness and requirements to maintain a pool of unencumbered assets. Copies of the Base Indenture and the Supplemental Indentures, including the form of Notes and the Guarantees, the terms of which are incorporated herein by reference, are attached as Exhibits 4.3, 4.4, 4.5, 4.6, 4.7 and 4.8 respectively, to this Current Report on Form 8-K.
The New Notes are Extra Space OP’s senior unsecured obligations and rank equally in right of payment with all of Extra Space OP’s other existing and future senior unsecured indebtedness. However, the New Notes are effectively subordinated in right of
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