UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

Current Report
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 15, 2016

 

CUBESMART

CUBESMART, L.P.

(Exact Name Of Registrant As Specified In Charter)

 

 

5 Old Lancaster Road, Malvern, Pennsylvania 19355

(Address of Principal Executive Offices)

 

(610) 535-5000

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On August 15, 2016, CubeSmart, L.P. (the “Operating Partnership”) and CubeSmart (the “Company”) completed the issuance and sale of $300 million in aggregate principal amount of the Operating Partnership’s 3.125% senior notes due September 1, 2026 (the “Notes”) and the Company’s related full and unconditional guarantee of the payment of principal, the make-whole 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 estimated transaction expenses payable by the Company, are approximately $296.1 million. The Operating Partnership intends to use the net proceeds from this offering to repay all of the outstanding indebtedness incurred under the unsecured revolving portion of its credit facility maturing in April 2020 and for working capital and other general corporate purposes, which may include repayment or repurchase of other indebtedness.

 

The Notes were issued under the indenture, dated as of September 16, 2011 (the “Indenture”), as supplemented by the Fourth Supplemental Indenture, dated as of August 15, 2016 (the “Fourth Supplemental Indenture”), among the Company, the Operating Partnership and U.S. Bank National Association, as trustee. The Indenture previously was filed with the Securities and Exchange Commission (the “Commission”) on September 16, 2011, as Exhibit 4.5 to the Company’s and the Operating Partnership’s registration statement on Form S-3 (File No. 333-176885) under the Securities Act of 1933, as amended (the “Securities Act”), and is incorporated into this Item 1.01 by reference. The Fourth Supplemental Indenture is being filed with the Commission as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated into this Item 1.01 by reference. A copy of the form of Note and a copy of the form of Guarantee are filed herewith as Exhibits 4.2 and 4.3, respectively, and incorporated into this Item 1.01 by reference.

 

The Notes will accrue interest at the rate of 3.125% per annum, with interest payable in cash semi-annually in arrears on each March 1 and September 1, commencing March 1, 2017. The Notes will mature on September 1, 2026.

 

The Notes are senior unsecured indebtedness of the Operating Partnership, ranking equally in right of payment with all of the Operating Partnership’s other unsecured unsubordinated indebtedness from time to time outstanding. The Notes are effectively subordinated to the indebtedness and other liabilities of the consolidated subsidiaries of the Operating Partnership.

 

The Operating Partnership may redeem the Notes, at any time and from time to time, prior to June 1, 2026 (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 and unpaid interest to the redemption date), assuming that such Notes matured on the Par Call Date, discounted to the redemption date on a semi-annual basis at a rate equal to the Treasury Rate (defined in the Fourth Supplemental Indenture) plus 25 basis points, plus accrued and unpaid interest to, but not including, the redemption date.

 

On or 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 and the Fourth Supplemental Indenture contain covenants that, among other things, (i) restrict the ability of the Operating Partnership and its subsidiaries to, subject to certain exceptions, incur additional debt and incur debt secured by liens, and (ii) restrict the Operating Partnership and its subsidiaries from owning unencumbered assets representing less than 150% of the outstanding principal amount of unsecured debt.

 

The 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.

 

The material terms of the Notes and the Guarantee are described in a prospectus supplement, dated August 8, 2016, as filed with the Commission on August 11, 2016 pursuant to Rule 424(b)(5) of the Securities Act, which relates to the offer and sale of the Notes and supplements the Operating Partnership’s prospectus, as filed with the Commission on March 18, 2014, contained in the Company’s and the Operating Partnership’s registration statement on Form S-3ASR (File No. 333-194661) under the Securities Act.

 

The foregoing is not a complete description of the Fourth Supplemental Indenture, the Notes and the Guarantee and is qualified in its entirety by reference to the full text of those documents attached to this Current Report on Form 8-K as Exhibits 4.1, 4.2 and 4.3, respectively, each of which is incorporated herein by reference.

 

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In connection with the foregoing, the Company and the Operating Partnership are filing as Exhibit 5.1 to this Current Report on Form 8-K the opinion of their counsel with respect to the validity of the Notes and the Guarantee.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant.

 

The information provided in Item 1.01 of this Current Report on Form 8-K pertaining to the Notes and the Guarantee is incorporated by reference into this Item 2.03.

 

Item 9.01 Financial Statements and Exhibits.

 

Exhibit Number		Description
4.1		Fourth Supplemental Indenture, dated as of August 15, 2016, among the Company, the Operating Partnership and U.S. Bank National Association.
4.2		Form of $300 million aggregate principal amount of 3.125% senior note due September 1, 2026.
4.3		Form of CubeSmart Guarantee (included in Exhibit 4.2).
5.1		Opinion of Pepper Hamilton LLP as to the legality of the Notes.
23.1		Consent of Pepper Hamilton LLP (included in Exhibit 5.1).

 

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Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	CUBESMART
Date: August 15, 2016	By:	/s/ Jeffrey P. Foster
		Name: Jeffrey P. Foster
		Title: Senior Vice President, Chief Legal Officer & Secretary
	CUBESMART, L.P.
	By:	CubeSmart, its general partner
Date: August 15, 2016	By:	/s/ Jeffrey P. Foster
		Name: Jeffrey P. Foster
		Title: Senior Vice President, Chief Legal Officer & Secretary

 

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EXHIBIT INDEX

 

 

Exhibit Number		Description
4.1		Fourth Supplemental Indenture, dated as of August 15, 2016, among the Company, the Operating Partnership and U.S. Bank National Association.
4.2		Form of $300 million aggregate principal amount of 3.125% senior note due September 1, 2026.
4.3		Form of CubeSmart Guarantee (included in Exhibit 4.2).
5.1		Opinion of Pepper Hamilton LLP as to the legality of the Notes.
23.1		Consent of Pepper Hamilton LLP (included in Exhibit 5.1).

 

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