Summary
Digital Realty Trust, Inc. (DLR) announced on April 16, 2012, the establishment of a $750 million senior unsecured term loan facility through its operating partnership, Digital Realty Trust, L.P. This facility, maturing in April 2017, provides significant financial flexibility by allowing borrowings in multiple currencies including AUD, GBP, EUR, SGD, and USD, with the potential to add HKD and JPY in the future. A key feature is the provision for up to $250 million to be drawn on a delayed basis for 90 days, indicating the company is securing funds for anticipated needs.
Key Highlights
- 1Digital Realty Trust, L.P. secured a new $750 million senior unsecured term loan facility.
- 2The facility matures in April 2017.
- 3Borrowings can be made in multiple currencies including AUD, GBP, EUR, SGD, and USD, with future options for HKD and JPY.
- 4Up to $250 million of the facility can be drawn on a delayed basis for up to 90 days.
- 5The company has the option to increase the facility size to $850 million.
- 6Interest rates are based on floating rates or base rates plus a margin tied to the company's credit rating.
- 7The loan agreement includes restrictive covenants and events of default, with potential acceleration of the loan upon default.
Frequently Asked Questions
The new $750 million senior unsecured term loan facility provides Digital Realty Trust, L.P. with increased financial flexibility to fund its operations and potential future investments. The multi-currency aspect and delayed draw provision suggest strategic planning for upcoming capital needs.
The term loan facility is for $750 million, matures in April 2017, and allows for borrowings in various currencies. It also includes an option to increase the facility size to $850 million. Interest rates are variable, dependent on the company's credit rating.
Yes, the loan agreement contains restrictive covenants. These include limitations on investments and mergers, requirements to maintain financial coverage ratios, and restrictions on the parent company (Digital Realty Trust, Inc.) making distributions to stockholders or repurchasing shares, except under specific circumstances like maintaining REIT status.
In the event of a default that is not cured within specified periods, the lenders holding a majority of the commitments and loans may accelerate the outstanding principal and accrued interest. Additionally, outstanding principal and interest automatically accelerate upon the entry of an order for relief concerning any borrower under bankruptcy or similar laws.