8-KRegulation FDExhibits & Filings

DIGITAL REALTY TRUST, INC. 8-K Report, Regulation FD Disclosure (Sep 14, 2010)

Filed September 14, 2010For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

This Form 8-K filing by Digital Realty Trust, Inc. (DLR) from September 14, 2010, primarily concerns adjustments to the conversion and exchange rates of its Series C Cumulative Convertible Preferred Stock and its 5.50% Exchangeable Senior Debentures due 2029. These adjustments are triggered by the company declaring and paying common stock dividends exceeding a specified "reference dividend" for its Series C Preferred Stock. The filing indicates that aggregate dividend payments since the first quarter of 2010 have resulted in a conversion rate adjustment for the Series C Preferred Stock to 0.5290 shares of common stock per $25.00 liquidation preference, effective September 13, 2010. Furthermore, DLR will be distributing a Notice of Adjustment to Exchange Rate to holders of its 5.50% Exchangeable Senior Debentures due 2029 on or after September 14, 2010. The filing also provides a snapshot of the conversion and exchange rates for various outstanding convertible and exchangeable securities as of September 13, 2010. This information is material for holders of these securities as it directly impacts their potential future equity ownership or the value of their investment.

Key Highlights

  • 1Digital Realty Trust (DLR) has adjusted the conversion rate for its 4.375% Series C Cumulative Convertible Preferred Stock to 0.5290 shares of common stock per $25.00 liquidation preference, effective September 13, 2010.
  • 2This conversion rate adjustment was triggered by dividend payments on DLR's common stock exceeding the 'reference dividend' specified in the Series C Preferred Stock's Articles Supplementary.
  • 3DLR will issue a Notice of Adjustment to Exchange Rate for its 5.50% Exchangeable Senior Debentures due 2029 on or after September 14, 2010.
  • 4The filing provides a schedule of conversion and exchange rates for DLR's convertible preferred stock and exchangeable senior debentures as of September 13, 2010.
  • 5This is a Regulation FD disclosure and is not deemed 'filed' for purposes of Section 18 of the Exchange Act.

Frequently Asked Questions

The adjustments are primarily due to Digital Realty Trust (DLR) paying dividends on its common stock that exceed the 'reference dividend' set for its 4.375% Series C Cumulative Convertible Preferred Stock. This action, according to the terms of the preferred stock's Articles Supplementary, triggers adjustments to the conversion rate.

The conversion rate has been adjusted to 0.5290 shares of DLR's common stock per $25.00 liquidation preference. This means that each preferred share is now convertible into a slightly different amount of common stock than before, potentially impacting the value proposition for preferred stockholders if they choose to convert.

The Notice of Adjustment indicates that the terms under which these debentures can be exchanged for Digital Realty Trust's common stock are being modified. Holders of these debentures should review the notice (Exhibit 99.1) for specific details on how their exchange rights have been affected.

The filing states that the conversion rates are 'subject to adjustment as provided in the Articles Supplementary' and that any adjustments not made due to not meeting a minimum threshold are carried forward. Therefore, these rates may be subject to further adjustments in the future based on subsequent dividend payments or other triggering events outlined in the security's governing documents.