8-KSecurities & ListingOther EventsExhibits & Filings

DIGITAL REALTY TRUST, INC. 8-K Report, Unregistered Securities Sale (Sep 1, 2010)

Filed September 1, 2010For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

This Form 8-K filing by DIGITAL REALTY TRUST, INC. (DLR) on September 1, 2010, primarily details an unregistered sale of equity securities. The company issued 373,487 restricted shares of its common stock, along with an incentive fee and accrued interest, in exchange for $11,847,000 in aggregate principal amount of its operating partnership's 4.125% Exchangeable Senior Debentures due 2026 held by Merrill Lynch, Pierce, Fenner & Smith Incorporated (BAML). This transaction, conducted under Section 4(2) of the Securities Act and Rule 506 of Regulation D, was an exempt offering not involving public solicitation. Digital Realty Trust also announced the filing of a prospectus supplement with the SEC, related to a shelf registration statement on Form S-3, to register the resale of these shares by BAML. The filing includes an opinion from Venable LLP regarding the validity of the shares.

Key Highlights

  • 1Digital Realty Trust (DLR) exchanged $11,847,000 principal amount of its 4.125% Exchangeable Senior Debentures due 2026 for 373,487 restricted shares of common stock with Merrill Lynch, Pierce, Fenner & Smith Incorporated (BAML).
  • 2The issuance of these shares was conducted as a private placement, exempt from registration under Section 4(2) of the Securities Act and Rule 506 of Regulation D.
  • 3The transaction involved an incentive fee payment of $77,909.36 and accrued interest on the exchanged debentures.
  • 4Digital Realty Trust is filing a prospectus supplement with the SEC to register the resale of these shares by BAML, utilizing its existing shelf registration statement on Form S-3.
  • 5The company has agreed to register the resale of the issued shares by BAML, indicating a potential future sale of these securities in the market.
  • 6An opinion from Venable LLP regarding the validity of the issued shares is included as an exhibit.
  • 7The exchange agreement for this transaction was previously filed on August 30, 2010, with the SEC.

Frequently Asked Questions

The primary event reported is the unregistered sale of Digital Realty Trust's common stock to Merrill Lynch, Pierce, Fenner & Smith Incorporated (BAML) in exchange for a portion of its outstanding 4.125% Exchangeable Senior Debentures due 2026. This transaction was conducted as a private placement.

Digital Realty Trust exchanged its common stock, along with an incentive fee and accrued interest, for the debentures. This suggests a debt-for-equity swap, which can be a way for companies to reduce leverage or manage their debt obligations without using cash, especially if the stock is considered an attractive form of consideration by the debt holder.

No, the shares were issued directly to BAML in a private transaction exempt from registration. However, Digital Realty Trust is filing a prospectus supplement to register the resale of these shares by BAML, meaning BAML can potentially sell these shares into the public market at a later date.

Filing a prospectus supplement allows BAML, the recipient of the shares, to sell them in the public market. It provides investors who purchase shares from BAML with important information about the company and the offering, as required by securities laws.