8-KFinancial EventsExhibits & Filings

DIGITAL REALTY TRUST, INC. 8-K Report, Financial Obligation (Aug 24, 2011)

Filed August 24, 2011For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) has filed an 8-K report detailing the establishment of a new Revolving Credit Agreement. This agreement, dated August 18, 2011, provides an initial aggregate facility of approximately $100.0 million USD, denominated in Australian Dollars (AUD) and Singapore Dollars (SGD). The facility has an option to be increased significantly, up to an aggregate of approximately $200.0 million USD. This move offers DLR enhanced financial flexibility for its international operations and potential growth. The agreement is structured to support DLR's subsidiaries in Singapore and Australia, with the operating partnership and the parent company, Digital Realty Trust, Inc., acting as guarantors. The credit facility is subject to customary covenants, including limitations on incurring additional debt, making investments, and maintaining financial ratios. Notably, it also places restrictions on distributions to stockholders, capping them at 95% of consolidated Funds From Operations, with exceptions to maintain REIT status and avoid taxes, highlighting a focus on financial stability and REIT compliance.

Key Highlights

  • 1Digital Realty Trust, Inc. (DLR) has entered into a new Revolving Credit Agreement, enhancing its financial flexibility.
  • 2The initial credit facility is approximately $100.0 million USD, composed of AUD and SGD, with a potential to increase up to $200.0 million USD.
  • 3The facility matures in August 2012, providing short-to-medium term funding access.
  • 4Borrowings are denominated in Singapore Dollars (SGD), Australian Dollars (AUD), with the future potential to draw in Hong Kong Dollars (HKD).
  • 5The agreement includes a commitment fee on unused portions of the credit facility, ranging from 0.25% to 0.50% annually.
  • 6Interest rates are variable, based on BBSY and SIBOR indexes plus a margin tied to DLR's senior unsecured debt ratings.
  • 7The credit facility contains covenants restricting debt, investments, and requiring maintenance of financial ratios, along with limitations on shareholder distributions to preserve REIT status and financial health.

Frequently Asked Questions

The Revolving Credit Agreement provides Digital Realty Trust, Inc. (DLR) with increased financial flexibility to support its international operations, particularly through its subsidiaries in Singapore and Australia. It allows for borrowing, repayment, and re-borrowing of funds, with an option for significant expansion, which can be used for general corporate purposes or strategic initiatives.

The initial aggregate amount available under the Revolving Credit Agreement is approximately $100.0 million US Dollars, composed of AUD and SGD. DLR has the option to increase the facility size up to an aggregate of approximately $200.0 million US Dollars, subject to lender commitments and other conditions.

The agreement includes several restrictive covenants. These limit DLR's ability to incur additional indebtedness, make certain investments, or merge with other companies. It also requires the maintenance of specific financial coverage ratios and a pool of unencumbered assets. Importantly, it restricts distributions to stockholders to 95% of consolidated Funds From Operations, with exceptions to maintain REIT qualification and tax status.

The Revolving Credit Agreement matures in August 2012.