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
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.
The Indenture contains covenants that, among other things, restrict the ability
of the Operating Partnership and its subsidiaries to, subject to certain
exceptions, (i) incur additional secured and unsecured debt and (ii) to
consummate a merger, consolidation or sale of all or substantially all of its
assets. The Indenture also requires the Operating Partnership and its
subsidiaries to maintain total unencumbered assets representing at least 150% of
the outstanding principal amount of unsecured debt. These covenants are subject
to a number of important exceptions and qualifications.
The Base Indenture also contains customary events of default, including, among
other things: (i) payment defaults, (ii) covenant defaults, (iii) cross-defaults
to other material indebtedness and (iv) certain events of bankruptcy, which if
any of them occurs, would permit or require the principal of and accrued
interest on the Notes to become or to be declared due and payable.
The offering of the Notes and related Guarantee were made pursuant to a
registration statement on Form
which became effective upon filing with the Securities and Exchange Commission
(the "Commission") on June 11, 2021. A prospectus supplement, dated
September 28, 2021, relating to the Notes and the Guarantee and supplementing
the prospectus was filed with the Commission pursuant to Rule 424(b)(2) under
the Securities Act of 1933, as amended. The material terms of the Notes and
related Guarantee are described in such prospectus supplement and accompanying
The Base Indenture was previously filed as Exhibit 4.1 to the Company's and the
Operating Partnership's Current Report on Form
filed with the Commission on June 20, 2016 and is incorporated herein by
reference. The Fifth Supplemental Indenture, the Notes and related Guarantee are
attached to this Current Report on
as Exhibits 4.1, 4.2 and 4.3, respectively, each of which is incorporated herein
The foregoing is not a complete discussion of the Base Indenture, the Fifth
Supplemental Indenture, the Notes and related Guarantee and is qualified in its
entirety by reference to the full text of those documents, each of which is
incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Sheet Arrangement of the Registrant.
The information provided in Item 1.01 of this Current Report on
pertaining to the Notes and Guarantee is incorporated by reference into this
Item 9.01. Financial Statements and Exhibits.
(d) The following exhibits are filed herewith:
4.1 Fifth Supplemental Indenture, dated as of October 7, 2021, among the
Company, the Operating Partnership and Wells Fargo Bank, National
4.2 Form of Note representing the Notes.
4.3 Form of Guarantee (included in Exhibit 4.2).
5.1 Opinion of Phillips Lytle LLP.
5.2 Opinion of Venable LLP.
23.1 Consent of Phillips Lytle LLP (included in Exhibit 5.1).
23.2 Consent of Venable LLP (included in Exhibit 5.2).
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