8-KMaterial AgreementsSecurities & ListingShareholder Matters+2

DIGITAL REALTY TRUST, INC. 8-K Report, Material Agreement (Apr 10, 2012)

Filed April 10, 2012For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) filed an 8-K on April 10, 2012, detailing significant events related to its financing activities, primarily the issuance of its 6.625% Series F Cumulative Redeemable Preferred Stock. The company completed an underwritten public offering of 7,000,000 shares of this preferred stock on April 5, 2012. This offering was supported by amendments to the company's charter and the operating partnership's limited partnership agreement, which established the Series F Preferred Stock and corresponding Series F Preferred Units with similar rights and preferences. These new Series F securities carry a fixed dividend rate of 6.625% per annum, payable quarterly, and rank senior to common stock with respect to dividend rights and liquidation preferences. The Series F Preferred Stock is redeemable at the company's option starting April 5, 2017, and also upon a Change of Control. Holders have conversion rights into common stock under certain Change of Control scenarios, subject to a cap. This filing clarifies the terms and conditions of this new preferred stock issuance, providing key details for investors regarding dividends, liquidation preference, redemption, and conversion rights.

Key Highlights

  • 1Digital Realty Trust, Inc. completed a public offering of 7,000,000 shares of 6.625% Series F Cumulative Redeemable Preferred Stock on April 5, 2012.
  • 2The Series F Preferred Stock has a liquidation preference of $25.00 per share and pays cumulative dividends of 6.625% annually, or $1.65625 per share, payable quarterly.
  • 3The Series F Preferred Stock ranks senior to common stock regarding dividends and liquidation, and on parity with other existing preferred stock series (C, D, E).
  • 4The company's operating partnership issued 7,000,000 Series F Preferred Units to Digital Realty Trust, Inc. in exchange for the net proceeds from the stock offering.
  • 5The Series F Preferred Stock may be redeemed by the company at its option on or after April 5, 2017, at $25.00 per share plus accrued dividends.
  • 6A Change of Control event triggers a special optional redemption right for the company and a conversion right for preferred stockholders into common stock, subject to certain conditions and a share cap.
  • 7The issuance of the Series F Preferred Stock and Units was conducted in reliance on exemptions from registration requirements.

Frequently Asked Questions

This 8-K filing primarily announces the completion of Digital Realty Trust's public offering of 6.625% Series F Cumulative Redeemable Preferred Stock and details the material definitive agreements and modifications to security holder rights associated with this issuance.

The Series F Preferred Stock has a liquidation preference of $25.00 per share. It pays a cumulative annual dividend of 6.625%, equivalent to $1.65625 per share, payable quarterly. Dividends are cumulative from April 5, 2012.

The Series F Preferred Stock can be redeemed by Digital Realty at its option on or after April 5, 2017, at $25.00 per share plus accrued dividends. It can also be redeemed upon a Change of Control. In the event of a Change of Control (unless redeemed), holders have the right to convert their shares into Digital Realty's common stock, subject to a specified cap and other conditions.

The Series F Preferred Stock ranks senior to the company's common stock with respect to dividend rights and rights upon liquidation, dissolution, or winding-up. It ranks on parity with other existing preferred stock series, such as Series C, D, and E.