8-KSecurities & ListingOther EventsExhibits & Filings

DIGITAL REALTY TRUST, INC. 8-K Report, Unregistered Securities Sale (Jul 27, 2010)

Filed July 27, 2010For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) filed an 8-K on July 27, 2010, reporting an unregistered sale of equity securities. The company issued 236,444 restricted shares of its common stock in exchange for $7,500,000 aggregate principal amount of its operating partnership's 4.125% Exchangeable Senior Debentures due 2026. This transaction was with Basso Holdings Ltd. and was structured to be exempt from registration under Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D. The company also reported filing a prospectus supplement and related prospectus with the SEC to register the resale of these shares. This filing indicates DLR's proactive approach to managing its outstanding debt obligations and complying with securities regulations, ensuring the shares issued can be resold into the market. Investors should note that while the shares were issued in a private transaction, DLR is taking steps to allow for their future public resale.

Key Highlights

  • 1Issuance of 236,444 restricted shares of DLR common stock on July 27, 2010.
  • 2Exchange of shares for $7.5 million in principal amount of 4.125% Exchangeable Senior Debentures due 2026.
  • 3Transaction conducted with Basso Holdings Ltd. (Cayman Islands exempted company).
  • 4Equity issuance qualified for exemption under Section 4(2) of the Securities Act and Rule 506 of Regulation D.
  • 5DLR filed a prospectus supplement to register the resale of these restricted shares.
  • 6The company provided an opinion from Venable LLP regarding the validity of the shares.
  • 7The exchange agreement and opinion of counsel were filed as exhibits to the 8-K.

Frequently Asked Questions

The primary purpose of this 8-K filing was to report an unregistered sale of equity securities. Digital Realty Trust, Inc. (DLR) issued restricted shares in exchange for a portion of its outstanding exchangeable senior debentures, effectively reducing its debt.

The shares were issued in a transaction exempt from registration under Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D. This exemption applies to private placements not involving a public offering, general solicitation, or advertising, and typically involves sophisticated investors.

DLR has filed a prospectus supplement and related prospectus with the SEC to register the resale of these shares. This means that while the initial issuance was private, the company is facilitating the ability for the shares to be sold in the public market in the future.

This transaction reduces DLR's outstanding principal amount of its 4.125% Exchangeable Senior Debentures due 2026 by $7.5 million. In return, the company issued equity, which will impact its capital structure by increasing the number of outstanding shares.