8-KSecurities & ListingOther EventsExhibits & Filings

DIGITAL REALTY TRUST, INC. 8-K Report, Unregistered Securities Sale (Nov 19, 2010)

Filed November 19, 2010For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) filed an 8-K on November 19, 2010, reporting the exchange of $18.985 million in aggregate principal amount of its operating partnership's 4.125% Exchangeable Senior Debentures due 2026 for approximately 601,127 restricted shares of DLR's common stock. This transaction was conducted with CBARB, a segregated account of Geode Capital Master Fund Ltd., and was exempt from registration under Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D. In connection with this exchange, DLR also filed a prospectus supplement and related prospectus with the SEC to register the resale of these shares by Geode. This filing indicates that while the shares were issued in a private placement, the company is taking steps to allow for their future public resale, which is a key consideration for the involved parties and the market. The company also provided an opinion from Venable LLP regarding the validity of the shares.

Key Highlights

  • 1Digital Realty Trust (DLR) exchanged $18.985 million in principal amount of its 4.125% Exchangeable Senior Debentures due 2026 for 601,127 restricted shares of common stock.
  • 2The transaction was completed with CBARB, a segregated account of Geode Capital Master Fund Ltd.
  • 3The issuance of these shares was conducted under an exemption from registration, specifically Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D.
  • 4The company has filed a prospectus supplement and related prospectus to register the resale of the issued shares by Geode.
  • 5This indicates a step towards enabling public trading of these previously privately held securities.
  • 6An opinion from Venable LLP was filed, confirming the validity of the issued shares.

Frequently Asked Questions

The primary purpose of this 8-K filing was to report the details of an exchange transaction where Digital Realty Trust, Inc. issued restricted shares of its common stock in exchange for a significant principal amount of its operating partnership's senior debentures. It also served to inform investors about the subsequent filing of a prospectus to allow for the resale of these shares.

No, the 601,127 restricted shares of common stock were issued in a transaction exempt from registration under Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D. However, Digital Realty Trust has filed a prospectus supplement to register the resale of these shares, making them eligible for public trading under specific conditions.

The counterparty was CBARB, a segregated account of Geode Capital Master Fund Ltd., a Bermuda-based mutual fund company.

The prospectus supplement is significant because it signals that the restricted shares issued in the private exchange will eventually be registered for resale. This provides a pathway for the holder (Geode) to potentially sell these shares into the public market, which could impact the supply and demand dynamics of DLR's common stock.